By Christian Moess Laursen
Shell's integrated gas trading boosted its quarterly earnings, driving a beat to consensus forecasts during a time when low oil prices and refining margins are expected to have hampered the profits of energy majors. Here is what the London-based oil-and-gas giant had to say.
On integrated gas:
The integrated gas division includes liquefied natural gas, or LNG, conversion of natural gas into gas-to-liquids, or GTL, fuels and other products.
"Total oil and gas production was in line with the third quarter 2023. LNG liquefaction volumes increased by 3% mainly due to lower maintenance."
"Earnings, compared with the third quarter 2023, reflected the net effect of higher contributions from trading and optimization, and realized prices, and higher volumes, partly offset by higher operating expenses, and unfavorable deferred tax movements."
"Trading and optimization results reflect seasonality and a high number of optimization opportunities."
On upstream:
The upstream segment includes exploration and extraction of crude oil, natural gas and natural gas liquids. It also markets and transports oil and gas.
"Total production, compared with the third quarter 2023, increased mainly due to lower scheduled maintenance and growth from new fields."
"Earnings, compared with the third quarter 2023, mainly reflected favorable movements in deferred tax positions and higher volumes."
On marketing:
The marketing segment comprises the mobility, lubricants, and sectors and decarbonization businesses.
"Marketing sales volumes--comprising hydrocarbon sales--, compared with the third quarter 2023, decreased mainly due to seasonality."
"Earnings, compared with the third quarter 2023, reflected lower marketing margins including lower lubricants margins due to higher feedstock costs and impact of seasonality on mobility margins, partly offset by higher sectors and decarbonization margins."
On chemicals and products:
The chemicals and products segment includes chemicals manufacturing plants and refineries, which turn crude oil and other feedstocks into a range of oil products.
"Chemicals manufacturing plant utilization was 62% compared with 70% in the third quarter 2023, due to higher planned and unplanned maintenance in North America and economic optimization."
"Refinery utilization was 81% compared with 84% in the third quarter 2023, due to planned maintenance in North America."
"Earnings, compared with the third quarter 2023, reflected lower products margins mainly driven by lower refining margins due to lower global product demand and lower margins from trading and optimization."
"Segment earnings also reflected lower chemicals margins including the impact of continuing global oversupply as well as weak demand and lower income from joint ventures and associates."
On renewables and energy solutions:
Renewables and energy solutions includes renewable power generation, the trading of power and pipeline gas, as well as carbon credits, and the production of hydrogen, and development of commercial carbon capture and storage hubs.
"Earnings, compared with the third quarter 2023, reflected higher margins mainly due to trading and optimization primarily in Europe and the Americas as a result of market volatility and seasonality, and favorable tax movements, partly offset by higher operating expenses."
On guidance for the first quarter:
"Integrated gas production is expected to be around 930,000-990,000 oil-equivalent barrels a day. LNG liquefaction volumes are expected to be around 7.0 million-7.6 million metric tons. Outlook reflects Prelude [LNG platform, off-shore Australia] back in operation after a major turnaround."
"Upstream production is expected to be approximately 1.73 million-1.93 million BOE a day. Production outlook reflects the planned maintenance in deep-water assets."
"Marketing sales volumes are expected to be approximately 2.15 million-2.65 million barrels a day."
"Refinery utilization is expected to be approximately 83%-91%, higher due to completion of planned maintenance activities in North America."
"Chemicals manufacturing plant utilization is expected to be approximately 68%-76%."
Write to Christian Moess Laursen at christian.moess@wsj.com
(END) Dow Jones Newswires
02-01-24 0646ET
