BAKU, Azerbaijan, June 3
By Leman Zeynalova – Trend:
Royal Dutch Shell’s oil output may fall substantially further from the current projections, Trend reports with reference to Fitch Solutions.
Royal Dutch Shell lost a court ruling in the Netherlands in which the judgement called for a reduction in carbon emissions by 45 percent by 2030 (from 2019 levels). Shell’s latest guidance from their Energy Transition Strategy from May 7 2021 looks to reach the 45 percent reduction point five years later in 2035 and against 2018 emission numbers, which Shell cite as their peak emissions. The one-year difference in CO2 levels may see Shell have to cut back slightly less, but over a significantly reduced timeframe.
“Shell is appealing the verdict; if the judgement were to stand, then we would expect to see increased capex diverted from traditional oil and gas activities and a wider divestment of the remaining traditional assets. Both actions would see oil production from Shell fall substantially further from the current projections of annual declines of 1-2% of oil output. Conventional oil and gas investment for Shell is focusing on six core areas the UK, Nigeria, Oman, Kazakhstan, Brunei and Malaysia. Other areas of traditional investment include shales (US, Canada and Argentina) and deepwater, with the core areas there being the Gulf of Mexico and Brazil.”
Shell’s oil products sales volumes are expected to be approximately 4,000 - 5,000 thousand b/d in Q2 2021. Chemicals manufacturing plant utilisation is expected to be approximately 76 – 84 percent. Chemicals sales volumes are expected to be approximately 3,500 - 3,800 thousand tonnes. Corporate Adjusted Earnings are expected to be a net expense of approximately $600 - $700 million in the second quarter 2021 and a net expense of approximately $2,400 - $2,800 million for the full year 2021. This excludes the impact of currency exchange rate effects.
Integrated Gas production of Royal Dutch Shell is expected to be approximately 880 - 940 thousand boe/d in Q2 2021.
LNG liquefaction volumes are expected to be approximately 7.6 - 8.2 million tonnes. Upstream production is expected to be approximately 2,150 - 2,350 thousand boe/d, reflecting lower seasonal gas demand and divestment impacts. Refinery utilization is expected to be approximately 73 percent – 81 percent.
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