Royal Dutch Shell Plc  .com Rotating Header Image

Shell writes down up to $4.5 billion in oil and gas assets

Shell writes down up to $4.5 billion in oil and gas assets

Royal Dutch Shell said on Monday it will write down $3.5 to $4.5 billion in the value of oil and gas assets in 2021, the latest in a string of impairments this year as it adjusts to a weaker outlook.

In an update ahead of its fourth quarter results on February 4, Shell said the post-tax charge was due in part to impairments on its Appomattox field in the U.S. Gulf of Mexico, the closure of refineries and liquefied natural gas (LNG) contracts.

It said some charges involved in its restructuring would be recognised in 2021.

Shell shares were down by around 4% in early trading in London.

In October, Shell, the world’s biggest LNG trader, wrote down the value of its LNG portfolio by just under $1 billion, focusing on its flagship Prelude project in Australia.

That followed a $16.8 billion writedown in the second quarter which also included Prelude and a sharp cut in its price outlook.

(Graphic: Downsizing, )

CEO Ben van Beurden on Feb. 11 will unveil Shell’s long-term strategy to sharply reduce its greenhouse gas emissions and expand its low-carbon energy and power businesses.

In its update, the Anglo-Dutch company also said it expects oil and gas production in its upstream division to be around 2.275 to 2.350 million barrels of oil equivalent per day, slightly higher than in the third quarter.

Production was impacted by the closure of platforms in the Gulf of Mexico due to hurricanes as well as mild weather in Northern Europe.

LNG liquefaction volumes are expected to be between 8 and 8.6 million tonnes.

Oil refinery utilisation is expected to be between 72% and 76% of capacity in the quarter, reflecting continued weak demand due to the coronavirus pandemic.

Shell, the world’s largest retailer, said its fuel sales were expected to be in a range of 4 to 5 million barrels per day, roughly similar to the third quarter.

Record profits from its marketing business, which includes over 45,000 petrol stations, strongly boosted Shell’s third-quarter results. The company said, however, that its fourth-quarter marketing results were expected to be “significantly lower” than the previous quarter.

Oil and gas trading profits were also set to decline sharply in the fourth quarter from the third quarter, it said.

(Graphic: Shell’s fuel sales, )

Reporting by Ron Bousso; editing by Louise Heavens and Jason Neely

SOURCE

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Comment Rules

  • Please show respect to the opinions of others no matter how seemingly far-fetched.
  • Abusive, foul language, and/or divisive comments may be deleted without notice.
  • Each blog member is allowed limited comments, as displayed above the comment box.
  • Comments must be limited to the number of words displayed above the comment box.
  • Please limit one comment after any comment posted per post.