BAKU, Azerbaijan, August 1. Shell reported varied performance in its Upstream segment for the second quarter of 2024, reflecting a combination of reduced write-offs and operating expenses, alongside the impacts of currency fluctuations and tax settlements, Trend reports via the company.
Compared to the first quarter of 2024, Q2 segment earnings benefited from lower well write-offs, which decreased by $313 million, and reduced operating expenses, down by $149 million. However, these positives were partly offset by a $149 million decline due to lower volumes.
The second quarter also saw specific financial impacts, including a $143 million loss related to the weakening Brazilian real on a deferred tax position, and a $122 million loss from a tax settlement in Brazil. These were somewhat mitigated by a $139 million gain due to inflationary adjustments in Argentina affecting a deferred tax position. These identified items contrast with the first quarter of 2024, which included a $460 million gain from similar inflationary adjustments in Argentina, offset by $102 million in net impairment charges and reversals.
Comparing the first half of 2024 to the same period in 2023, Shell's Upstream segment earnings were influenced by unfavorable movements in deferred tax positions, amounting to $415 million, and increased well write-offs totaling $366 million. These were partially balanced by a $197 million net gain from higher realized oil prices and lower realized gas prices.
For the first half of 2024, segment earnings also included $599 million in gains from inflationary adjustments in Argentina on a deferred tax position, offset by a $191 million loss due to the weakening Brazilian real and net impairment charges and reversals of $169 million. These identified items compare with the first half of 2023, which saw $176 million in impairment charges, $127 million in charges related to Brazil's oil export tax, and a $140 million gain from the strengthening Brazilian real on a deferred tax position.
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