Shell slightly increased its guidance on Tuesday for its second-quarter integrated gas production, although output would be down sharply from the first three months of the year due to the impact of the Middle East conflict.
The British oil major also expects trading and optimisation at its integrated gas segment to be “significantly higher” in April-June than in the first quarter, the group said in a quarterly trading update.
Trading results at its chemicals and products unit, which includes the group’s big oil trading desk, are expected to be in line with the previous quarter’s strong performance.
Oil majors including Shell and its European peers BP BP.L and TotalEnergies TTEF.PAreported strong oil trading in the first quarter, benefiting from price volatility due to the U.S.-Israeli war with Iran.
Shell guided for its integrated gas output in the April-to-June period to be about 610,000 to 650,000 barrels of oil equivalent per day, down around 30% from the 909,000 boed it produced in the first quarter.
It previously expected a range of 580,000 to 640,000 boed.
Production at Shell’s Pearl gas-to-liquids plant in Qatar was haltedin March after an attack on Ras Laffan Industrial City damaged one of the facility’s two trains. Shell has said repairs could take about a year.
About 20%, or 550,000 boed, of Shell’s oil and gas production comes from the Middle East, with around 10% of that Qatar-related.
Shell also forecast a $1 billion to $6 billion working-capital inflow in the second quarter, compared with an $11.2 billion outflow in the first quarter, reflecting the impact of volatility in commodity prices. Working capital is a liquidity measure of current assets minus liabilities.
Shell guided for higher indicative refining margins of about $20 per barrel and chemicals margins of about $240 per tonne in the second quarter, although it said the realised margins were lower than those levels due to market dislocations.
(Reuters – Reporting by Stephanie Kelly; Editing by Susan Fenton)
