Shell to up oil production to 2400 barrels per day

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Shell has said its production is expected to go up to between 2,300 and 2,400 thousand barrels of oil equivalent per day.

The oil giant said although this production range is higher compared with the outlook previously provided, it has had a limited impact on earnings in the current macro environment

Updates related to receivables and inventory provisions are expected to have a negative earnings impact in the range of $200 to $400 million compared with the second quarter 2019. No cash impact is expected in the second quarter

As previously communicated, CFFO is expected to be negatively impacted by the Lula unitisation settlement in Brazil of around $500 million, for which the earnings impact was recognised in the third quarter 2018

While earnings are expected to show a loss, CFFO is not expected to reflect equivalent cash tax receipts due to the build-up of deferred tax positions in a number of countries. Additionally, due to phasing impacts, tax payments are expected in the second quarter.

Regarding oil products the company said refinery utilisation is expected to be between 67% and 71%; Realised gross refining margins are expected to be significantly lower compared with the first quarter 2020 and are expected to be offset by higher trading and optimisation results; Oil Products sales volumes are expected to be between 3,500 and 4,500 thousand barrels per day, driven by a significant drop in demand related to the impact of COVID-19; Updates related to receivables provisions are expected to have a negative earnings impact in the range of $200 to $300 million.

“No cash impact is expected in the second quarter; Working capital in Oil Products are typically impacted by movements between the quarter opening and closing price of crude along with changes in inventory volumes. Inventory volumes are expected to be higher compared with the end of the first quarter 2020, impacting working capital negatively.”

Source: Laudbusiness.com/Ghana

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