Stronger Energy Prices Boosted Shell's Earnings in 2Q -- Commodity Comment
July 29 2021 - 3:05AM
Dow Jones News
By Jaime Llinares Taboada
Shell on Thursday reported that its adjusted earnings rose in
the second quarter. Here's what the oil-and-gas major had to
say:
On Integrated Gas
"Compared with the first quarter 2021, Integrated Gas Adjusted
Earnings primarily reflected higher realized prices for LNG, oil
and gas, lower comparative operating expenses due to credit
provisions in the first quarter 2021 and favorable deferred tax
movements."
"Compared with the first quarter 2021, total oil and gas
production decreased by 3% mainly due to higher maintenance
activities and field decline, partly offset by production sharing
contract effects."
"LNG liquefaction volumes decreased by 8% due to higher
maintenance activities and feedgas constraints."
On Upstream:
"Compared with the first quarter 2021, Upstream Adjusted
Earnings reflected higher realized oil prices, and the one-off
release of a tax provision in Nigeria of $628 million."
"Compared with the first quarter 2021, total production
decreased by 8%, mainly due to unfavorable seasonal effects and
higher maintenance activities."
On oil products:
"Compared with the first quarter 2021, Oil Products Adjusted
Earnings reflected higher Retail margins, and higher contributions
from trading and optimization, partly offset by higher operating
expenses driven by recovery in sales volumes."
"Oil Products sales volumes increased due to higher demand and
favorable seasonal effects."
"Refining & Trading Adjusted Earnings reflected higher
realized refining margins (while Refining Adjusted Earnings still
being negative), higher contributions from trading and optimization
and lower depreciation."
"Marketing Adjusted Earnings reflected higher Retail margins
partly offset by higher operating expenses driven by recovery in
sales volumes."
On Chemicals:
"Compared with the first quarter 2021, Chemicals Adjusted
Earnings reflected higher base chemicals margins, partly offset by
lower intermediate margins, and higher operating expenses due to
maintenance phasing."
"Chemicals manufacturing plant utilization was 82% compared with
79% in the first quarter 2021, due to lower unplanned
downtime."
On 3Q outlook:
"Due to the impact of maintenance activities, Integrated Gas
production is expected to be approximately 870 - 920 thousand boe/d
and LNG liquefaction volumes are expected to be approximately 7.4 -
8.0 million [metric] tons."
"Upstream production is expected to be approximately 2,100 -
2,250 thousand boe/d."
"Refinery utilization is expected to be approximately 73% -
81%."
"Oil Products sales volumes are expected to be approximately
4,300 - 5,300 thousand b/d."
"Chemicals manufacturing plant utilization is expected to be
approximately 77% - 85%."
"Chemicals sales volumes are expected to be approximately 3,600
- 3,900 thousand tons."
"Corporate Adjusted Earnings are expected to be a net expense of
approximately $600 - $700 million in the third quarter 2021 and a
net expense of approximately $2,300 - $2,600 million for the full
year 2021."
Write to Jaime Llinares Taboada at jaime.llinares@wsj.com;
@JaimeLlinaresT
(END) Dow Jones Newswires
July 29, 2021 02:52 ET (06:52 GMT)
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