Shell to Take $2 Billion Tax Hit for 4Q as Integrated Gas Trading Rose -- Update
January 06 2023 - 3:38AM
Dow Jones News
By Joe Hoppe
Shell PLC said Friday that it expects to take a $2 billion hit
for the fourth-quarter from additional taxes in the European Union
and the U.K. government's energy windfall tax, and that its
integrated gas trading and optimization results significantly rose
on quarter.
Recently announced additional taxes in the European Union, and
the deferred tax hit from the increased U.K. government's energy
profits levy are expected to amount to around $2 billion for the
fourth quarter.
The company said the taxes and levies will be reported as
identified items, and so won't affect fourth-quarter adjusted
earnings. They will have a limited cash hit in the fourth quarter
given the expected timing of payments.
The energy group said production for the fourth quarter in
Integrated Gas is anticipated to be between 900,000 and 940,000
barrels of equivalent oil per day compared with 924,000 barrels in
the third quarter and prior guidance of 910,000 to 960,000 barrels.
This reflects a longer-than-expected outage at its Prelude
site.
Liquefaction volumes guidance has also been lowered to 6.6
million to 7.0 million metric tons, from prior guidance of 7.0
million to 7.6 million tons.
It said it expects fourth-quarter pretax depreciation of between
$1.2 billion and $1.6 billion.
On a corporate level, the company expects to post an adjusted
earnings loss of $550 million to $750 million.
Shell said it expects fourth quarter upstream production of 1.8
million to 1.9 million barrels of oil equivalent a day compared
with 1.8 million in the third quarter, and that it expects a pretax
depreciation between $3.1 billion and $3.5 billion. It had
previously forecast fourth-quarter upstream production of 1.8
million to 2.0 million barrels a day.
Marketing results are expected to be lower than in the third
quarter, with sales expected to be between 2.4 million and 2.8
million barrels of oil a day compared with 2.6 million barrels a
day quarter prior, the company said. It had previously forecast
fourth-quarter marketing sales volumes of 2.3 million to 2.8
million a day.
In the chemicals and products division, the indicative refining
margin is expected to be $19 a barrel compared with $15 a barrel in
the prior quarter. The indicative chemical margin is expected to
swing to positive $37 a ton, from negative $27 a ton a quarter
prior.
However, trading and optimization and chemicals results are
expected to fall on quarter due to the beginning of depreciation
for its Pennsylvania project, Shell Polymers Monaca. For the third
quarter, it reported refining and trading sales volumes of 1.8
million barrels a day.
Write to Joe Hoppe at joseph.hoppe@wsj.com
(END) Dow Jones Newswires
January 06, 2023 03:23 ET (08:23 GMT)
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