Thursday, 24 September 2020 | 15:49
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Decisive Actions And Strong Performance Deliver Cash

Thursday, 30 July 2020 | 23:00

▪Robust operational delivery across the portfolio. Very strong crude and oil products trading and optimisation results andresilient Marketing performance.

▪On track to deliver cost reduction targets:

▪Underlying opex reduced by $1.1 billion compared with Q1 2020; delivering reduction target of $3 – $4 billion.

▪Cash capex reduced by $1.4 billion compared with Q1 2020; manage cash capex to $20 billion or lower in 2020
.
▪Impairments of $16.8 billion post-tax (6.1% of average capital employed), reflecting revised price and margin assumptions.

Q2 2020 FINANCIALPERFORMANCE DRIVERS
▪COVID-19 pandemic-related demand decline led to lower LNG andgas-to-liquids revenues, mostly due to lower realised prices.

▪LNG trading and optimisation results marginally below average.

▪Additional well write-offs and deferred tax charges had a negativeimpact of $0.6 billion on Adjusted earnings, but no cash impact.

OUTLOOK FOR Q3 2020
Production: 820 – 880 thousand boe/d. Liquefaction: 7.6 – 8.2 milliontonnes. Due to price lag in oil-linked LNG term contracts, the impact oflow oil prices is expected to become more significant in the third quarter

▪Weak macroeconomic environment driving lower Upstream Adjustedearnings.

▪Despite strong Upstream operational performance, production 7%lower compared with Q2 2019 due to divestments and OPEC+curtailments.

▪Upstream sales volumes up due to timing of liftings mainly in Brazil.OUTLOOK FOR Q3 2020Production: 2,100 – 2,400 thousand boe/d.Outlook reflects expected OPEC+ and economic curtailments for entirequarter.
Source: Shell

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