European oil majors Royal Dutch Shell and Total reported a sharp decline in profits in the second-quarter of 2016, as the low oil price continued to weigh on earnings.
Shell's second-quarter earnings on a current cost of supplies (CCS) basis attributable to shareholders (excluding identified items) was USD 1 billion, down from USD 3.8 billion in the same period last year, a 70 percent fall. CCS is a common accounting measure for commodity-reliant businesses. This was also below the USD 2.2 billion forecast by analysts.
"Lower oil prices continue to be a significant challenge across the business, particularly in the Upstream," Ben van Beurden, chief executive of Shell said in a statement.
Meanwhile, France's Total said second-quarter adjusted net income was down 30 percent year-on-year to USD 2.2 billion, but noted on a quarter-on-quarter basis, it actually rose.
"Although still volatile, the Brent price has recovered since the start of the year and averaged USD 46 per barrel in the second quarter of 2016. Total captured the benefit of this rebound, and adjusted net income rose to USD 2.2 billion in the second quarter of 2016, an increase of 33 percent compared to the first quarter 2016," Total chief executive Patrick Pouyanne, said in a statement.
Between late May and the middle of June, the price of Brent had risen above USD 50 per barrel, but has since come off to trade in the low USD 40s.