As Shell prepares to disclose its financial forecast for the fourth quarter, the company has outlined expected production volumes and performance metrics. These projections will be finalized and made available on February 5. It is important to recognize that actual outcomes may vary due to market dynamics.
This article examines various segments of Shell’s operations, including Integrated Gas, Upstream, Marketing, Chemicals and Products, and Renewables and Energy Solutions. It summarizes their projected performance metrics and associated operational costs.
Table of Contents:
Integrated Gas segment performance
In the Integrated Gas segment, Shell expects a slight decrease in production. For the fourth quarter, production is projected to range between 930 and 970 thousand barrels of oil equivalent per day (kboe/d), compared to 934 kboe/d in the previous quarter. Additionally, the company aims for Liquefied Natural Gas (LNG) liquefaction volumes between 7.5 and 7.9 million tonnes (MT), an increase from 7.3 MT in the last quarter.
Operational expenses and taxation
The underlying operational expenditure (opex) for this segment is projected to slightly increase, estimated between 1.2 and 1.4 billion USD. The pre-tax depreciation, a vital measure for evaluating asset value, is expected to fall between 1.4 and 1.8 billion USD. Furthermore, the taxation charge for the quarter is anticipated to range from 0.6 to 0.9 billion USD, reflecting potential shifts in fiscal policy.
Upstream operations forecast
In the Upstream sector, Shell forecasts an increase in production, with estimates ranging from 1,840 to 1,940 kboe/d, slightly above the 1,832 kboe/d recorded in the previous quarter. This increase is attributed to the inclusion of the Adura joint venture, which is expected to positively impact production figures.
Cost management and taxation impact
For operational expenses, the expected underlying opex is projected between 2.1 and 2.7 billion USD. The anticipated pre-tax depreciation is forecasted to range from 2.4 to 3.0 billion USD. Additionally, the taxation charge in this segment is estimated to be between 1.4 and 2.2 billion USD, reflecting ongoing adjustments to tax strategies.
Marketing and chemicals divisions
The marketing division’s sales volumes are anticipated to decline seasonally, with projections indicating sales between 2,650 and 2,750 thousand barrels per day (kb/d), down from 2,824 kb/d in the previous quarter. This decrease is attributed to seasonal demand fluctuations. The underlying opex for the marketing segment is estimated between 2.3 and 2.7 billion USD.
In the Chemicals and Products sector, the indicative refining margin is expected to improve slightly to $14 per barrel (bbl), while the indicative chemicals margin may decrease to $140 per tonne. Utilization rates in refining are projected to remain steady at 93% to 97%.
Renewables and energy solutions
For the Renewables and Energy Solutions segment, Shell anticipates adjusted earnings to fluctuate between (0.2) and 0.2 billion USD. This reflects ongoing challenges in achieving profitability amid the transition to renewable energy sources.
As Shell approaches the fourth quarter, several key factors will influence its performance across various sectors. The forthcoming results will shed light on how the company navigates the evolving energy landscape and responds to market conditions.
