Unfortunately, that looks like wishful thinking. It would be nice to think that Shell (LON:RDSa) will be able to move on after putting the writedowns behind it. Other impairments, notably in Australia and Singapore, took the total value of writedowns in the quarter to $2.94 billion, although the company was also able to soften the blow by booking some non-cash gains on derivatives and deferred tax positions. The company joins an ever-growing list of majors forced to admitted their bet on shale has turned sour: Chevron (NYSE:CVX), BP (LON:BP) and Equinor (OL:EQNR) have all already taken similar hits, unable to escape the glut caused by associated gas coming out of new oil fields in the Permian and other shale basins. Gearing, of course, depends on the value of the company’s equity as well as its debt, and that was hit by some painful writedowns, notably $1.65 billion mainly related to U.S. Gearing, the ratio of debt to equity, rose to 29.3% from 27.9% three months earlier – drifting further away from its medium-term target of 25%. In the three months to December, it had bought $2.8 billion, but that had only been made possible by allowing the debt reduction target to slip. The hit was so severe that the Anglo-Dutch giant said it would slow the pace of share buybacks to only $1 billion in the current quarter, from an average of $2.5 billion a quarter over the last 18 months. LNG liquefaction volumes were slightly higher on the quarter, averaging 8 million - Royal Dutch Shell (LON:RDSa) shares tumbled to their lowest in nearly three years on Thursday after the company unveiled a wretched set of figures for the fourth quarter of 2019, hit by falling operating margins and big writedowns on investments in North American shale gas and elsewhere. Shell's fuel sales averaged 4.3 million barrels per day in the quarter, down from 4.45 million bpd in the previous quarter, Shell said. Earnings from oil trading are set to be "significantly higher" in the quarter.Ĭashflow in the quarter would be negatively impacted by "very significant" outflows of around $7 billion as a result of changes in the value of oil and gas inventories. Shell, the world's largest liquefied natural gas trader, said earnings from LNG trading were expected to be higher in the quarter compared with the previous three months. The unprecedented volatility in commodity prices in recent months has pushed several traders to the brink as they scrambled to sharply increase downpayments for oil and LNG cargoes. Shell did not provide any guidance on the future of its stakes in Russian projects.īenchmark oil prices soared to an average of more than $100 a barrel in the quarter, their highest since 2014, while European gas prices hit a record high. General view of a Shell petrol station sign, in Milton Keynes, Britain, January 5, 2022. Shell said it will exit all its Russian operations, including a major liquefied natural gas plant in the Sakhalin peninsula in the eastern flank of the country. The start of 2022 marked one of the most turbulent periods in decades for the oil and gas industry as Western companies including Shell rapidly pulled out of Russia, severing trading ties and winding down joint ventures following Moscow's invasion of Ukraine. Shell shares were down 1.2% at the start of London trading. The increase was due to additional potential impacts around contracts, writedowns of receivables, and credit losses in Russia, a Shell spokesperson said. Shell, whose market capitalisation is around $210 billion, had previously said the Russia writedowns would reach around $3.4 billion. The post-tax impairments of between $4 billion and $5 billion in the first quarter will not impact the company's earnings, Shell said in an update ahead of its earnings announcement on May 5. LONDON, April 7 (Reuters) - Shell (SHEL.L) will write down up to $5 billion following its decision to exit Russia, more than previously disclosed, while soaring oil and gas prices boosted trading activities in the first quarter, the company said on Thursday.
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