Shell and Statoil kicked off what looks set to be a weak second-quarter reporting season for oil and gas majors Thursday – and both companies warned of further negative risks to the oil price.
Exxon Mobil, the biggest oil company in the world by market value, is expected to reinforce the gloomy picture when it reports in the United States later on Thursday.
Peter Voser, chief executive of
“We are investing throughout the cycle and our long-term view is that demand will grow, particularly for gas, and that will drive our profitability in the long-term,” he added.
Shell reported second-quarter adjusted earnings fell to around $5.7 billion, down from $6.6 billion at the same time in 2011 and lower than analysts’ forecasts of close to $6.3 billion. Voser argued that the weakness was partly caused by maintenance costs.
The company also announced that it has let its offer for Mozambique-based explorer Cove lapse.
Helge Lund, chief executive of Statoil, told CNBC: “We believe it (the oil price) will hover around the current level for the remainder of the year but with significant downside risk related to the global macroeconomic situation.”
Statoil's second-quarter adjusted operating profit rose 5 percent to 45.8 billion crowns ($7.52 billion), below expectations for 47.56 billion crowns in a Reuters poll of analysts. The state-controlled company’s results were hit by production problems after a strike by some offshore workers, as well as falling prices and rising production costs.
It has recently ramped up production in anticipation of growing demand in the long-term.
The price of benchmark Brent crude futures fell by 7 percent from a year earlier to an average of $108.76 a barrel in the second quarter, the first year-on-year decline since 2009 as China’s economic growth slowed and the euro zone debt crisis continued (click here to find out more about the world's biggest oil reserves).
Voser was optimistic on the future for Shell’s shale gas assets and argued that the market is underestimating the potential of these assets.
He said: “In the U.S. it’s becoming increasingly clear there’s more available. We see it coming in other places too. We are refining the technologies, there’s a great future for unconventional gas, and that’s not yet seen in the market.”
-Written by Catherine Boyle, CNBC.com. Twitter: @catboyle01