Shell raises gas output guidance for Q2, flags stronger gas trading results
By Stephanie Kelly
Shell’s Q2 Performance and Market Impact
Updated Gas Output Guidance
LONDON, July 7 (Reuters) - Shell slightly increased its guidance on Tuesday for its second-quarter integrated gas production, although output would be down sharply from the first three months of the year due to the impact of the Middle East conflict.
Trading and Optimisation Results
The British oil major also expects trading and optimisation at its integrated gas segment to be "significantly higher" in April-June than in the first quarter, the group said in a quarterly trading update.
Chemicals and Products Unit Performance
Trading results at its chemicals and products unit, which includes the group's big oil trading desk, are expected to be in line with the previous quarter's strong performance.
Industry Context and Competitive Landscape
Oil majors including Shell and its European peers BP and TotalEnergies reported strong oil trading in the first quarter, benefiting from price volatility due to the U.S.-Israeli war with Iran.
Production Figures and Regional Impact
Shell guided for its integrated gas output in the April-to-June period to be about 610,000 to 650,000 barrels of oil equivalent per day, down around 30% from the 909,000 boed it produced in the first quarter.
It previously expected a range of 580,000 to 640,000 boed.
Qatar Operations and Disruptions
Production at Shell's Pearl gas-to-liquids plant in Qatar was halted in March after an attack on Ras Laffan Industrial City damaged one of the facility's two trains. Shell has said repairs could take about a year.
About 20%, or 550,000 boed, of Shell's oil and gas production comes from the Middle East, with around 10% of that Qatar-related.
Financial Forecasts and Margins
Shell also forecast a $1 billion to $6 billion working-capital inflow in the second quarter, compared with an $11.2 billion outflow in the first quarter, reflecting the impact of volatility in commodity prices. Working capital is a liquidity measure of current assets minus liabilities.
Shell guided for higher indicative refining margins of about $20 per barrel and chemicals margins of about $240 per tonne in the second quarter, although it said the realised margins were lower than those levels due to market dislocations.
(Reporting by Stephanie Kelly; Editing by Susan Fenton)
