7th Apr 2022 08:36
(Alliance News) - Shell PLC on Thursday said it will book an impairment of between USD4 billion and USD5 billion in the first quarter of 2022 after exiting its operations in Russia.
"These charges are expected to be identified and therefore will not impact adjusted earnings. Details of the accounting treatment and impact of ongoing developments will be provided at the first quarter 2022 results announcement," the energy major said.
The firm last month said it would withdraw from involvement in all Russian hydrocarbons, including crude oil, petroleum products, gas and liquefied natural gas, following Russia's attack on Ukraine.
The London-based oil and gas company said the withdrawal would be done in a "phased manner" in alignment with new government guidance.
In addition, Shell on Thursday said operating cash flow is expected to be hurt by "very significant" working capital outflows, as price increases impacting inventory have led to a cash outflow of around USD7 billion.
"Reflecting the unprecedented volatility in commodity prices prevailing up to the end of the quarter, material additional movements could be seen in CFFO from margining effects on derivatives, changes in inventory volumes and in accounts payable and receivables," it cautioned.
Looking at divisions, it expects production between 860,000 and 910,000 barrels of oil equivalent per day in Integrated Gas. LNG liquefaction volumes are expected to be between 7.7 million and 8.3 million tonnes.
Upstream production is expected to be between 1.9 million and 2.1 million barrels of oil equivalent per day with underlying operating expenditure between USD2.3 billion and USD2.7 billion.
Oil Products marketing results are "expected to be in line with the fourth quarter 2021" with trading & optimisation results "significantly higher", and Chemicals margins are seen in line with the last quarter of 2021.
Shares in Shell were down 1.5% at 2,099.50 pence in London early Thursday.
By Lucy Heming; [email protected]
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