- Shell made £22.4 billion profit in 2023, down more than 30% from the previous year
- It warned that trading results for its integrated gas business are expected to be lower
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Oil giant Shell expects significantly lower results from its liquefied natural gas trading in the first quarter of 2024, after an excellent fourth quarter last year.
But Shell also told shareholders on Friday that oil trading results are expected to be significantly higher than in the final quarter of 2023.
The world’s largest oil and gas trader said its LNG volumes in the first three months of 2024 are expected to be between 7.2 million and 7.6 million tonnes, up from 7.1 million tonnes in the previous quarter.
Forecast: Shell expects production in its integrated gas division of between 960,000 and 1 million barrels of oil equivalents per day in the first three months of 2024
The company expects production in its integrated gas division of between 960,000 and 1 million barrels of oil equivalents per day in the first three months of 2024, versus previous expectations of 930,000 to 990,000 boepd.
However, it warned that trading results for the segment are expected to be “significantly lower” than in the fourth quarter.
Shell also said indicative refining margins are expected to be $12 per barrel, up from $10 in the fourth quarter, while indicative margins for chemicals should rise from $125 per tonne to $151 per tonne.
Meanwhile, the FTSE 100 group said it would book an estimated $600 million in writedowns on exploration wells, largely related to projects in Albania.
Shell posted £22.4 billion in profits in 2023, down more than 30 percent on the previous year as oil and gas prices fell from exceptionally high levels.
But the profit result was the second highest in the company’s 116-year history, beating analyst expectations of £21.2 billion.
The London-based company also paid £18.2 billion to shareholders and announced plans to buy back a further £2.8 billion of its own shares in the first quarter.
Shell’s latest guidance comes as oil prices rise above $90 a barrel for the first time since October due to tensions in the Middle East, steady OPEC+ production and a Ukrainian drone attack on the second second largest refinery in Russia.
“Fundamentally, oil prices are cyclical, with ups and downs always expected,” said Sophie Lund-Yates, chief equity analyst at Hargreaves Lansdown.
‘However, the price trajectory has been particularly bumpy in recent years and it is unclear when this will level out in the longer term.’
Shell shares were 0.3 per cent higher at £27.72 on Friday morning and have almost tripled since the start of October 2020.