Shell a global integrated exploration and production company has released its financial and operational year report for the fourth quarter 2020.
Integrated gas and new energies
- LNG realised prices significantly below Q4 2019, with some recovery seen during the quarter.
- Average trading and optimisation results.
- Lower opex driven by lower operations and maintenance costs as well
- as underlying structural cost reductions.
- Strong cash conversion despite derivatives cash outflow.
Upstream
- Lower prices, lower demand and unfavourable deferred tax movements driving lower Adjusted Earnings.
- Production 14% lower compared with Q4 2019 due to OPEC+ curtailments, divestments, higher maintenance, lower gas demand and hurricanes in US Gulf of Mexico. as underlying structural cost reductions.
- Strong cash conversion with CFFO excluding working capital contribution of $2.9 billion.
- Production outlook for Q1 2021: 2,400 – 2,600 thousand boe/d
Oil products
- Continued weakness in refining margins, despite some recovery from Q3 2020, lower intake and utilisation due to lower demand and Convent refinery shutdown.
- Strong Marketing unit margins offset by lower volumes due to COVID-19 second wave.
- Lower opex driven by lower maintenance costs and Marketing spend as well as underlying structural cost reductions.
- Trading and optimisation results significantly below average
- Outlook for Q1 2021: Sales volumes: 4,000 – 5,000 thousand b/d / Refinery utilisation: 73% – 81%
Chemicals
- Higher base and intermediate chemicals margins across most product segments.
- Higher JV income due to improved margins and demand in Asia.
- Strong cash conversion with CFFO excluding working capital contribution of $0.8 billion.
- Outlook for Q1 2021: Sales volumes: 3,600 – 3,900 thousand tonnes / Manufacturing plant utilisation: 80% – 88%
Q4 2020 Portfolio developments
During the quarter, QGC Common Facilities Company Pty Ltd, a
wholly-owned subsidiary of Shell, announced that it has agreed to the sale of a
26.25% interest in the Queensland Curtis LNG Common Facilities to Global
Infrastructure Partners Australia for US$2.5 billion. The transaction is
subject to regulatory approval in Australia and customary conditions and is
expected to complete in the first half of 2021.
In January 2021, Shell completed the sale of its 30% interest in Oil Mining
Lease 17 in the Eastern Niger Delta, and associated infrastructure, to TNOG Oil
and Gas Limited, a related company of Heirs Holdings Limited and Transnational
Corporation of Nigeria Plc, for a consideration of $533 million. A total of
$453 million was paid by completion with the balance to be paid over an agreed
period.
“2020 was an extraordinary year. We have taken tough but decisive actions and demonstrated highly resilient operational delivery while caring for our people, customers and communities. We are coming out of 2020 with a stronger balance sheet, ready to accelerate our strategy and make the future of energy. We are committed to our progressive dividend policy and expect to grow our US dollar dividend per share by around 4% as of the first quarter 202,” Royal Dutch Shell Chief Executive Officer, Ben van Beurden, said
