Since the beginning of this year, due to the impact of the new coronary pneumonia epidemic and the steep fall in international oil prices, the global oil and gas industry has entered a difficult situation where supply and demand are under pressure, and market demand has fallen sharply by up to 20 million barrels per day.

The producer country has reached the largest production reduction agreement in the history of tens of millions of barrels, and it still cannot stop the decline of oil prices. The price of WTI futures delivered in May fell to an “impossible” low of minus 40 dollars per barrel. A series of unprecedented historical new changes have taken place in the supply and demand pattern of the oil industry. People in the industry exclaimed that the entire industry is entering a “dark moment.”

The deepest feeling is naturally the domestic and foreign oil companies. On April 29, China National Petroleum (601857.SH) and other three major domestic oil companies successively released their first quarterly annual reports, handing over the “most green” performance answers in recent years, causing a stir in the capital market and investors.

From April 28th to May 5th, five major international oil companies including BP, Shell, ExxonMobil, Chevron and Total have also released The overall performance in the first quarter is also in a situation where the flowers are similar every year.


Directly facing the bleak first quarter

In the first quarter, with the sharp drop in international oil prices, the overall performance of the five major international oil companies declined The trend is that cash flow and capital expenditures have decreased significantly, the capital-liability ratio has risen, and the return on net assets has fallen.

Among them, BP realized a profit of 800 million US dollars, a year-on-year decrease of 67%; cash flow of 1.2 billion US dollars, a year-on-year decrease of 80%; capital expenditure of 3.5 billion US dollars, year-on-year Reduced by 100 million yuan; capital debt ratio was 36.2%, an increase of 5.8% year-on-year; oil and gas production equivalent decreased by 2.9% year-on-year.

Shell ’s return on net assets in the first quarter was 4.2%, a year-on-year decrease of 4.6 percentage points; capital-liability ratio was 28.9%, a year-on-year increase of 2.4%; oil and gas production equivalent decreased by 1% year-on-year .

ExxonMobil ’s loss in the first quarter was US $ 600 million, a year-on-year decrease of US $ 3 billion; capital expenditure was US $ 7.1 billion, a year-on-year decrease of 4%; oil and gas production equivalent was 4 million barrels / Day, an increase of 2%.

Chevron achieved sales revenue of 30 billion yuan, a year-on-year decrease of 11.76%;Capital expenditures decreased by US $ 14 billion year-on-year; operating cash flow was US $ 4.7 billion, a significant year-on-year decrease.

During the same period, Total achieved an adjusted net profit of US $ 1.78 billion, down 35% year-on-year, and operating cash flow was US $ 1.3 billion, down 64% year-on-year. The company’s upstream oil and gas production increased by 5%, but cash flow fell by 39%.

Compared with the performance of the three major domestic oil companies, the overall situation of the five major international oil companies is better. In the first quarter, the domestic “two barrels of oil” loss was about 35 billion yuan.

The reason is that on the one hand, the impact of the global spread of new coronary pneumonia in the first quarter has just appeared, and it has only gradually intensified since April, affecting the international company ’s first quarter operating performance limited. But for domestic oil companies, against the backdrop of China ’s first-quarter GDP decline of 6.8% year-on-year, oil and gas sales have started to decline rapidly since late January, and the highest single-day decline in refined oil sales in February reached about 80%.

On the other hand, the internationalization index of large international companies is generally above 60%, with a high degree of internationalization, which is conducive to optimizing the allocation of resources and optimizing investment projects globally , Relatively diversified business risks. At the same time, they generally regard the development of terminal service business and new energy business as an important measure to resist the risk of low oil prices and transformation and development, and the enterprise’s overall ability to resist risks is stronger. In this regard, the advantages of major international oil companies, especially European companies, are relatively obvious.

For example, Total ’s LNG sales in the first quarter increased by 30%, and its renewable energy generation capacity exceeded 6GW.

More importantly, large international companies have more means, quicker adjustments and greater efforts to cope with this round of low oil prices. Unlike state-owned oil companies such as China National Petroleum Corporation, which are subject to various restrictions and influences in terms of institutional mechanisms, policy environment, and liability protection, the five major international companies have adjusted their strategies for low oil prices extremely quickly and without excessive burdens.

Since the oil price plummeted in early March, major international oil companies quickly adjusted their investment plans for this year in just over 10 days, and quickly made decisions to postpone or abandon a batch of large capital Project investment is more focused on investing in short-cycle, low-risk and high-return projects, and capital expenditures have been greatly reduced, while upstream production targets have been lowered, especially the high-cost shale oil production in the Permian Basin in the United States to reduce oil prices. The loss caused.

At the same time, the International UniversityThe company drastically launched a series of measures to reduce costs and ensure cash flow, focusing on reducing operating costs, suspending share repurchases, accelerating debt issuance and substantial layoffs. From the perspective of layoffs only, Total has clearly stated that it will stop recruiting new employees by 2020, ExxonMobil has cut 1,800 third-party employees, and Chevron started a new round of layoffs in April.

According to the previous round of layoffs of approximately 10% since the low oil price in 2016, during the current round of low oil prices, the five major international oil companies with nearly 400,000 employees Companies, the total number of layoffs may not be less than 30,000.

In contrast, domestic oil companies, in accordance with the country ’s “six stability” and “six guarantees” requirements, this year alone, PetroChina recruited an additional 3,000 university graduates. In fact, from the point of view of the actions of state-owned oil companies in responding to low oil prices, a series of measures such as reducing investment, controlling projects, reducing costs, preventing risks, and increasing benefits are quickly introduced. Their profitability is not inferior to that of major international companies. The card is slightly single.


Thanks to the second quarter of severe challenges

Compared with the 2019 results, the performance of the first quarter does verify that the oil industry is entering The cruel reality of “the darkest moment”.

In 2019, under the background of volatile international oil prices and relatively loose supply and demand, major international oil companies have performed stably, and the industry ’s general presence has basically come out of 2016. The optimism of the round of falling oil prices showed the industry’s self-confidence that is “better than the pace of leisure”.

The upstream oil and gas production of the five major international oil companies in 2019 has maintained their growth for the sixth consecutive year, with an average increase of 3.5% year-on-year. The actual capital expenditure has shown a slight increase. Among them, upstream investment increased by 3.6% year-on-year, and downstream investment increased by 25.3% year-on-year.

However, due to factors such as the decrease in refinery operating rate and the divestiture of terminal business, downstream crude oil processing volume and oil product sales both declined. The performance of benefits showed a significant downward trend. Their revenue and net profit decreased by 8.8% and 40.3% year-on-year respectively. Among them, the upstream and downstream profits have fallen sharply for the first time in recent years, and the “hard wound” caused by the decline in international oil prices has already appeared.

Looking back at the major domestic oil companies, last year ’s performance and key operating indicators were relatively good. Domestic oil companies continue to interpret the overall table when oil prices are highIt is now superior to internationally comparable companies, and its overall performance is lower than the historical cycle of internationally comparable companies when oil prices are low.

Taking PetroChina as an example, compared with the five major international oil companies, PetroChina ’s crude oil output, natural gas output and oil and gas equivalent output all ranked first in the last year, and the capital debt ratio And its own cash flow is at a good level, and its total profit and net profit are at a medium level. However, the return on net assets is at a relatively low level, which reflects to a certain extent the practical problems of state-owned oil companies that are “large but not strong” and their asset creation ability is weak.

All the past is the prologue. The performance in 2019 has to a certain extent also reserved for the oil companies to cope with this round of low oil prices and ammunition.

If crossing the oil industry “dark moment” is like passing a bridge, I am afraid that the first quarter is only the approach stage, and the real test is still in the second quarter.

The global spread of New Coronary Pneumonia continues and there is no turning point. The number of infected people worldwide exceeds 3.75 million and continues to rise. Well-known consulting agencies in the industry generally predict that the low demand for the whole year and the low oil prices are expected to be in the second quarter.

Judging from the situation in April, the average price of Brent crude oil futures was only US $ 26.62 per barrel, a decrease of 21% from the previous month. It is foreseeable that although major domestic and foreign oil companies have entered the “survival mode” to cope with low oil prices, overall performance continues to decline by a certain degree. In particular, state-owned oil companies will continue to increase their net profit losses in the second quarter. The pressure on the market is more prominent.

From the perspective of the whole year, it is expected that the growth of oil and gas production of major international oil companies for six consecutive years will end this year. It will continue, the decline in operating income and net profit will continue to accelerate, and the overall situation will be more severe compared with the same period last year.

(The author is a senior practitioner in the energy industry. This article is for the reader, and the content of the article does not represent the surging news position.)