Royal Dutch Shell PLC (LSE:RDSB) said it expects stronger results from its gas business in the fourth quarter, despite supply chain issues, while demand at its oil division was hit by the Omicron variant of Coronavirus (COVID-19).
In a trading update, the energy giant predicted fourth-quarter results in its Integrated Gas business will be significantly higher than in the third quarter, “overcoming ongoing supply issues and capturing unique optimisation opportunities generated through the large scale and scope of our LNG trading portfolio in the prevailing high LNG spot price environment”.
The energy giant said production and liquefaction volumes were impacted by unplanned maintenance, mainly in Australia. It forecast production of 910,000-950,000 barrels of oil equivalent per day. LNG liquefaction volumes are expected to be between 7.7mln-8.3mln tonnes.
In the Upstream business, it expects production of 2.15mln-2.25mln barrels of oil equivalent per day in the fourth quarter.
The Oil Products division was impacted by seasonal trends, the Omicron virus and the fall in the Turkish lira in the fourth quarter and trading and optimisation results are expected to be significantly lower than the previous three months, Shell said.
Oil Products sales volumes are forecast in the range of 4mln-5mln barrels per day.
Shell said margins in its Chemicals division as well as associated joint-venture earnings are expected to be significantly lower than the third quarter 2021, primarily due to weaker base chemicals margins.
It forecast Chemical sales volumes of 3.3mln-3.6mln tonnes for the final quarter of 2021.
It said Chemicals manufacturing plant utilisation was lower compared to the third quarter due to Hurricane Ida recovery efforts on the US Gulf Coast and extended turnaround at its Scotford refinery.
The company said it will distribute the remaining US$5.5bn of proceeds from the Permian disposal in the form of share buybacks at pace.
When the company announced the US$9.5bn sale of its Permian assets to ConocoPhillips (NYSE:COP) in September, it promised to return US$7bn of the proceeds to shareholders.