Shell said it hoped to revise upward the value of its oil and gas assets after the company raised its long-term outlook for commodity prices amid rising demand and disrupted oil flows. energy driven by the Russian war in Ukraine.
Europe’s largest oil company has raised its supposed price in 2023 for Brent crude, the European benchmark, to $ 80 a barrel and said it would reverse up to $ 4.5 billion in previously assumed write-downs on the value of its oil business. and gas up. The total value of Shell’s production and exploration assets was recorded at $ 125.5 billion at the end of 2021.
“In the second quarter of 2022, Shell has revised oil and gas commodity prices in the medium to long term reflecting the current macroeconomic environment, as well as the updated fundamentals of energy market demand and supply,” Shell said in a commercial update before his semester. results on July 28th.
Large oil and gas companies have reduced the value of many of their assets by billions of dollars in recent years, as an anticipated change in hydrocarbons and the Covid-19 pandemic reduced projected fuel demand. fossils.
Shell is the first to review some of those rebates, according to Biraj Borkhataria of RBC Capital Markets, who predicted that others would follow.
“It’s the first, but it won’t be the last,” he said. “Given where commodity prices are, I would expect more to come.”
Oil rose to $ 139 a barrel earlier this year after the Russian invasion, while gas is trading at record levels. Since then, fears of a recession have lowered prices, and Brent fell below $ 100 a barrel on Wednesday for the first time in three months, but many analysts expect the period of high oil prices to persist and of gas, driven by sustained demand and a new limited supply. .
Restrictions on exports of Russian oil products after the invasion of Ukraine have exacerbated the shortage of global capacity of the refinery, which has raised the prices of refined products such as diesel. Shell’s refining margins during the second quarter nearly tripled to $ 28.04 a barrel from $ 10.23 in the first three months of the year. The increase would increase profits by $ 800 billion to $ 1.2 billion, Shell noted, although investment bank Jefferies said it was lower than expected.
Liquefied natural gas production in the second quarter was expected to be 7.4-8 million tonnes, he said, compared to 8 million tonnes in the first three months of the year. This included the elimination of its share of volumes from the Sakhalin-2 LNG project in the far east of Russia, which would reduce the profits of the integrated gas division by $ 300 million to $ 500 million.
Shell, the world’s largest LNG trader, pledged to cede its 27.5% stake in the project after the invasion of Ukraine and last week Moscow threatened to nationalize it. Global LNG demand has soared this year as European buyers have sought alternatives to pipeline gas from Russia.
Shell expects trade in oil and refined products to be “strong” in the second quarter, but lower than in the first three months of the year. He said the results of the gas sale would also be lower, compared to the “exceptional” performance the division recorded in the first quarter.
The $ 8.5 billion in share repurchase announced for the first half of the year was completed on July 5, he said.
Shares of the oil group rose 2.3% on London’s first quotes on Thursday, boosting gains over the past 12 months to 38%.