Shell profit slumps on lower oil prices
Oil major Shell recorded a 25 percent decrease in its second quarter profit due to lower oil prices while its production was up by 4 percent during the period.
Shell on Thursday posted CCS earnings excluding identified items of $3.6 billion for 2Q 2019, a 25% decrease compared to 2Q 2018 and earnings of $4.8 billion.
Compared with the second quarter 2018, CCS earnings attributable to shareholders excluding identified items were $3.5 billion, reflecting lower realized oil, gas and LNG prices, weaker realized chemicals and refining margins as well as higher provisions, partly offset by improved production, Shell said.
Earnings also included a negative impact of $63 million related to the implementation of IFRS 16.
In the second quarter of 2019, Shell’s revenues were $90.5 billion, compared to $96.8 billion in the corresponding period last year.
Total production available for sale in 2Q 2019 was 3.58 million barrels of oil equivalent a day, a 4% increase compared to 3.442 million barrels of oil equivalent a day in the same period last year.
Royal Dutch Shell Chief Executive Officer, Ben van Beurden, commented: “We have delivered good cash flow performance, despite earnings volatility, in a quarter that has seen challenging macroeconomic conditions in refining and chemicals as well as lower gas prices.
“This quarter we achieved some key milestones, such as the start-up of Appomattox and the first LNG cargo from Prelude. These add to our competitive portfolio, which is expected to generate additional cash in the coming quarters. The resilience of our Upstream and customer-facing businesses and their ability to generate cash support the delivery of our 2020 outlook, which remains unchanged.”
For the third quarter 2019, Shell expects integrated gas production to be at a similar level as in the third quarter 2018. LNG liquefaction volumes are expected to increase slightly compared with the third quarter 2018, mainly due to project rampups.
Compared with the third quarter 2018, Upstream production is expected to be higher by some 50 – 100 thousand boe/d, mainly due to field ramp-ups and the transfer of the Salym asset from the Integrated Gas segment, partly offset by field decline and divestments.
Offshore Energy Today Staff
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