Shell poised for robust fourth-quarter surge in gas trading profits amidst contrasting fortunes in oil products and chemicals

New Delhi [India], January 8 : London-based energy giant Shell Plc has provided an update on its outlook for the fourth quarter of 2023, expecting a substantial increase in earnings from gas trading.

However, the company foresees lower profits in the buying and selling of oil products and chemicals.

According to a press release by Shell, the trading update, issued on Monday, highlights the impact of seasonal shifts in the gas market and increased production of liquefied gas, a key driver of profits for Shell.

In contrast, the chemicals and oil products division is expected to incur a loss for the period, according to the trading update.

Shell's trading performance in the prior quarter met expectations, aligning with a mixed results season for oil majors.

The company, led by Chief Executive Officer Wael Sawan, has been actively repurchasing shares and is committed to enhancing shareholder returns.

Shell is scheduled to release its fourth-quarter results on February 1.

Shell's gas trading division has proven lucrative, especially since the increased volatility in gas prices following Russia's invasion of Ukraine.

The company has adjusted its production range for gas and revised its liquefaction forecasts, anticipating an increase from 6.7 million tons to 6.9 million tons.

Meanwhile, trading and optimization from the chemicals and oil products division are expected to see a significant decrease compared to the previous quarter.

Profit from Shell's chemicals unit, a substantial part of its operations, is projected to remain flat compared to the previous year.

Chemicals utilization is expected to be lower, ranging between 60 per cent to 64 per cent, while the indicative margin is set to increase by USD 10 to USD 125 per ton.

The forecast range for upstream production volume has been narrowed from 1.83 million to 1.93 million barrels a day.

Additionally, Shell anticipates non-cash post-tax impairments in the fourth quarter, ranging from USD 2.5 billion to USD 4.5 billion.

The company attributes these impairments to macroeconomic and external developments, along with portfolio choices, including the Singapore Chemicals & Products assets.

Shell, as an international energy company, specializes in the exploration, production, refining, and marketing of oil and natural gas.

The company also focuses on the manufacturing and marketing of chemicals, incorporating advanced technologies and innovative approaches to contribute to a sustainable energy future.

Shell invests in renewable energy sources, electric vehicle charging, and low-carbon fuels, such as advanced biofuels and hydrogen.

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