Energy giant Shell to take up to $2 billion in writedowns on its Rotterdam and Singapore plants
The Shell logo is displayed outside a petrol station in Radstock on February 17, 2024 in Somerset, England.
Matt Cardy | Getty Images News | Getty Images
Energy giant Shell said Friday it expects to take an after-tax impairment charge of up to $2 billion, mainly related to its plants in Singapore and Rotterdam, while saying its key gas division would decline in the quarter.
Shell said Tuesday it would temporarily suspend construction of its 820,000-tonne-per-year biofuels production facility in Rotterdam due to current market conditions. The move led the oil company to forecast that it will record a non-cash after-tax impairment charge of between $600 million and $1 billion for the Rotterdam hub when it reports second-quarter results on Aug. 1, Shell said Friday.
The oil giant also anticipates a second non-cash after-tax writedown of $600 million to $800 million after agreeing to sell its Singapore refining and chemicals plant in May.
Separately, the company said it now expects second-quarter trading and optimization performance in the base gas division to be in line with the same period last year, but lower than the first quarter of 2024 “due to seasonality.”
“There’s something for everyone in this release,” RBC Capital Markets analysts said in a note Friday, noting that among major sectors and operations, liquefied natural gas volumes were “in line with expectations, while upstream production was stronger than previously expected and oil trading surprised to the upside.”
In contrast, RBC reported “higher corporate costs and a neutral result from the chemicals division.”
News Source : www.cnbc.com
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