European energy giants record drastic profits drop in Q2

By Al Mayadeen English
Source: Agencies
27 Jul 2023 13:27

The net profits of four of the largest European energy firms reported a slash in profits in the second quarter of 2023.

Illustration of a gas pressure sensor with stars in reference to the flag of the European Union (AFP)

European energy giants recorded a slump in the second quarter as gas and oil prices plummeted from last year's highs following Western sanctions on Russia.

Net profits of France's TotalEnergies, Spain's Repsol, British Shell, and Norway's Equinor drastically dropped as the firms are diverting investments into low-carbon projects.

Low energy demands also contributed to the slashing of profits, as the economies of Europe's major industrial countries are suffering from historic inflation rates.

Repsol reported a staggering 44 percent drop in net profits in the first six months of 2023 - reaching 1.42 billion euros ($1.6 billion) - compared to the same period in 2022.

TotalEnergies, on the other hand, said it hit a 28 percent downturn, $4.1 billion between April and June compared to the same period last year.

"In a favorable but softening oil and gas environment TotalEnergies once again delivered this quarter robust results, strong cash flow, and attractive shareholder distribution," TotalEnergies's CEO Patrick Pouyanne said in an earnings statement.

Repsol cited "falling energy prices and demand" and the firm's "decisive steps in its transformation and in launching an innovative multi-energy offer for its customers."

The Spanish state-owned company announced in 2020 plans to invest 18.3 billion euros by 2025 as part of a 2050 initiative to achieve zero net emissions and focus on renewable energy and hydrogen.

Some three billion euros that Repsol invested so far targeted mainly Spain and the US between January and June this year, the company said on Thursday, noting that 35 percent of investments this year will be in low-carbon projects. Repsol also stated that it will increase investment in alternative raw materials such as vegetable oils, used cooking oils, and biomass.

"We are consistently delivering strong earnings in challenging environments as we continue to transform the company and build a unique multi-energy offering that facilitates a just transition for our customers," Repsol chief Josu Jon Imaz said.