Shell Puts a Figure on Windfall Tax Hit

Shell expects an impact of around $2 billion from the UK and EU windfall taxes in the final quarter of 2022.  

Alliance News 6 January, 2023 | 9:20AM
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Shell (SHEL) on Friday said it expects an impact of around $2 billion from the UK and EU windfall taxes in the final quarter of 2022.

"These impacts will be reported as identified items and therefore will not impact Q4 2022 adjusted earnings and will have limited cash impact in Q4 2022 given the expected timing of payments," Shell said.

This is on top of Shell paying $4.30 billion to $4.70 billion in tax for the quarter.

Further, the London-based oil major expects to produce around 900,000 to 940,000 barrels of oil equivalent per day for its Integrated Gas Unit in the fourth quarter, compared to 927,000 a year ago.

It anticipates a quarterly liquefied natural gas liquefaction volume of 6.6 million to 7.0 million tonnes, compared to 7.94 million a year ago. Further, it expects trading & optimisation in the unit to be significantly higher compared to the third quarter.

For Upstream, the company expects production of 1.825 million to 1.925 million barrels of oil equivalent per day in the fourth quarter. A year ago, Shell posted a total Upstream production available for sale of 2.16 million barrels of oil equivalent per day.

For Chemicals & Products, Shell expects an indicative refining margin of $19 per barrel in the fourth quarter, up from $15 in the third quarter. For indicative chemicals margin, it expects an increase of 19% to $37 per tonne from $27 in the third quarter. It expects trading & optimisation to be significantly lower compared to the third quarter.

"Chemicals results are expected to be lower than Q3'22 in part due to the commencement of depreciation for Shell Polymers Monaca, the Pennsylvania Chemicals project," Shell explained.

For Corporate, Shell expects an adjusted quarterly loss of between $550 million and $750 million, narrowing from $889 million a year prior.

Shell shares rose 1.5% to £23.46 each on Friday morning in London.

Shell expects to release its annual results for 2022 on February 2.



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