SHEL Shell Plc

By Joe Hoppe

Shell PLC said Thursday that it would reverse previous impairments of up to $4.5 billion to its upstream and integrated gas assets in the second quarter after it raised its energy-prices outlook.

The oil major said it had raised its mid- and long-term oil and gas commodity prices outlook in the second quarter to reflect the current macroeconomic environment as well as updated energy-market demand and supply fundamentals.

The company also said it expects its integrated gas production to be between 930,000 and 980,000 barrels of oil equivalent a day, and liquid natural gas liquefaction volumes to be between 7.4 million and 8.0 million metric tons. Its trading and optimization result for integrated gas is expected to slip on-quarter in the second quarter.

The company expects to report a hit of $300 million to $350 million following the derecognition of its Sakhalin assets in Russia, after a presidential decree in that country changed the ownership structure of the project.

Shell further expects one-off charges of around $200 million in the second quarter to its integrated gas assets, including well write-offs, provisions and commercial settlements.

Production in its upstream assets are expected to be between 1.85 billion and 1.95 billion barrels of oil equivalent per day, reflecting higher scheduled maintenance.

Second-quarter marketing earnings are expected to rise on-quarter, to be in-line compared with the second quarter of 2021.

The company expects its chemicals and products division's trading and optimization results to be strong in the second quarter, though to be lower than the first quarter.

Improvements to the refining margin--which rose to $28.04 a barrel from $10.23 a barrel in the first quarter--are expected to add between $800 million and $1.2 billion to the second-quarter results when compared to the first quarter of 2022.

The renewables-and-energy solutions division expects to post second-quarter earnings of $400 million to $900 million, benefiting from higher trading and optimization margins.

Shares at 0708 GMT were up 44.8 pence, or 2.3% at 2,019.0 pence.

Write to Joe Hoppe at joseph.hoppe@wsj.com

(END) Dow Jones Newswires

July 07, 2022 03:30 ET (07:30 GMT)

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