- Shell said gas output was hit by ‘scheduled maintenance’ at a Qatari plant
- The FTSE 100 company said oil refining margins stayed at £4.41 per barrel
Shell has warned of a $1.3billion cashflow impact for the fourth quarter of 2024 due to payments of emissions certificates.
Europe’s largest energy firm said the payments concerned biofuel programmes in the US and Germany’s Fuel Emissions Trading Act.
It came as the oil supermajor told shareholders profits would be ‘significantly lower’ in the fourth quarter, owing to the expiry of hedging contracts.
Shell’s total gas output for the final three months of last year will also likely be lower owing to maintenance at a Qatari plant.
The firm expects its integrated gas segment to have produced 880,000 to 920,000 barrels of oil equivalent per day during the period, compared to 941,000 Boe/d in the third quarter.
It said production was hit by ‘scheduled maintenance’ at its Pearl Gas to Liquids plant, the world’s largest GTL facility, which Shell runs with QatarEnergy.
Shell also cut its fourth-quarter liquefied natural gas production forecast to between 6.8 million and 7.2 million metric tons following a drop in cargoes and feed gas, having previously anticipated 6.9 million to 7.5 million tons.
Financial hit: Shell has warned of a $1.3billion cashflow impact in the fourth quarter
Meanwhile, the FTSE 100 group said oil refining margins stayed at around $5.5 (£4.41) per barrel after falling significantly last year.
Brent crude futures ended 2024 around 3 per cent down at $74.64 per barrel, its second successive year of decline.
Oil prices were affected by a weak Chinese economy, slower demand growth, and increasing supplies from the United States and OPEC+ countries.
Prices have fallen significantly since early 2022, when loosening Covid-19 restrictions and Russia’s full-scale invasion of Ukraine provided a massive windfall for the fossil fuels sector.
However, firms have continued to record impressive results while providing shareholders with bumper returns.
In its third-quarter results, Shell reported adjusted earnings of $6billion for the three months ending September on the back of strong LNG demand.
Under its chief executive, Wael Sawan, the company has cancelled plans to reduce oil production and said it will not launch any new offshore wind projects.
Mark Crouch, a market analyst at investment platform eToro, said the latter move ‘raises questions about the long-term viability of windfarms as a practical investment for the company’s shareholders’.
He added: ‘Sawan’s relentless focus on pursuing projects that generate value for investors seems to prioritise short-term returns over longer-term renewable energy commitments.’
Shell shares were 1.4 per cent down at 2,581.5p on Wednesday morning, although they remain above their pre-pandemic levels.
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