• Natural Gas News

    Shell Warns of Further Upstream Losses in Q4

Summary

The Anglo-Dutch major expects to book $100-200mn in depreciation and $600-900mn in tax charges across its upstream business in the quarter.

by: Joe Murphy

Posted in:

Natural Gas & LNG News, Europe, Top Stories, Premium, Corporate, Exploration & Production, Financials, Companies, Europe, Royal Dutch Shell, News By Country, United Kingdom

Shell Warns of Further Upstream Losses in Q4

Shell expects to incur another adjusted loss from its upstream business in the fourth quarter because of weak prices, the Anglo-Dutch major said in an earnings update on December 21.

Upstream production is forecast to average 2.275-2.35mn barrels of oil equivalent/day during the three months, versus an earlier guidance of 2.3-2.5mn boe/d. Output has been affected by the impact of hurricanes in the US Gulf of Mexico and mild weather in northern Europe, the company said. Its upstream business produced 2.2mn boe/d in the third quarter.

Shell expects to book $100-200mn in depreciation charges and $600-900mn in tax charges in Q4 across its upstream operations. The company suffered adjusted upstream losses of $1.5bn in Q2 and $884mn in Q3.

Output at Shell's integrated gas segment is seen averaging 900,000-940,000 boe/d, up from an earlier forecast of 830,000-870,000 boe/d, with liquefaction volumes expected at 8.0-8.6mn metric tons, compared with an earlier guidance of 7.9-8.5mn mt. The company noted that 80% of its LNG sales were indexed to oil prices with a lag effect of up to six months.