Environment

Energy giant Shell to take up to a $2 billion impairment hit on Rotterdam, Singapore plants

The Shell logo is displayed outside a petrol station in Radstock on February 17, 2024 in Somerset, England.
Matt Cardy | Getty Images News | Getty Images

Energy giant Shell on Friday said it expects to record a post-tax impairment hit of up to $2 billion mainly linked to its Singapore and Rotterdam plants, while also saying trading in its key gas division will decline on the quarter.

This comes after Shell on Tuesday announced it would temporarily suspend on-site construction at its 820,000 metric tons a year biofuels facility in Rotterdam amid current market conditions. The decision has led the oil company to project it will book a non-cash post tax impairment between $600 million and $1 billion for the Rotterdam hub when it publishes second-quarter results on Aug. 1, Shell said Friday.

The oil major also anticipates a second non-cash post-tax impairment of $600-800 million after agreeing to divest its Singapore refining and chemicals plant back in May.

Separately, the company said it now expects the second-quarter performance of trading and optimization in the core gas division to come in line with the same period of last year but below the first quarter of 2024 “due to seasonality.”

“There is something for everyone in this release,” analysts at RBC Capital Markets said in a Friday note, signaling that, among core areas and operations, volumes of liquefied natural gas were “as expected, while upstream production was stronger than previously guided, and oil trading surprised to the upside.”

On the downside, RBC flagged “higher corporate costs and a neutral result from the chemicals division.”

Articles You May Like

TV sex therapist dies, aged 96
‘I was humiliated, laughed at and led naked through a police custody suite’
Trump changes ‘humdinger’ of a speech after assassination attempt as he arrives for Republican National Convention
British Gas owner Centrica in talks to find new chairman
Zelenskyy reacts to Biden’s ‘President Putin’ gaffe