Key Takeaways:
Shell lifted its Q2 integrated gas output forecast to as much as 650,000 boed while flagging a sharp jump in gas trading profits.
Shell slightly raised its second-quarter integrated gas production guidance Tuesday to as high as 650,000 barrels of oil equivalent per day, while flagging that gas trading and optimization results would be "significantly higher" than the first three months of the year, the company said in a quarterly trading update.
The British oil major now expects integrated gas output of 610,000 to 650,000 boed in the April-to-June period, up from a prior range of 580,000 to 640,000 boed. That still represents a decline of about 30 percent from the 909,000 boed produced in the first quarter, reflecting the impact of the Middle East conflict on Shell's operations.
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 processing trains. Shell has said repairs could take about a year. About 20 percent, or 550,000 boed, of Shell's total oil and gas production comes from the Middle East, with roughly 10 percent of that tied to Qatar.
Trading results at the chemicals and products unit, which houses the group's large oil trading desk, are expected to be in line with the first quarter's strong performance. Oil majors including Shell and its European peers BP and TotalEnergies reported robust oil trading in the first quarter, benefiting from price volatility triggered by the US-Israeli war with Iran.
Working Capital Swing and Margin Outlook
Shell forecast a $1 billion to $6 billion working-capital inflow in the second quarter, a sharp reversal from the $11.2 billion outflow recorded in the first quarter, reflecting the impact of volatility in commodity prices. Working capital, a liquidity measure of current assets minus liabilities, swung as price moves affected the timing of cash settlements.
The company guided for higher indicative refining margins of about $20 per barrel and chemicals margins of about $240 per ton in the second quarter, though it cautioned that realized margins were running below those levels due to market dislocations.
The quarterly update comes as European energy majors navigate a complex operating environment shaped by geopolitical risk, supply disruptions and volatile commodity prices. Shell's ability to sustain trading profits while managing the Pearl GTL outage and broader Middle East exposure will be closely watched when it reports full second-quarter results.
This article is for informational purposes only and does not constitute investment advice.
