Third quarter 2019 update
This is an update to the third quarter 2019 outlook provided in the second quarter results announcement on August 1, 2019. The impacts presented here may vary from the actual results and are subject to finalisation of the third quarter 2019 results which are scheduled to be released on 31 October 2019.
Presented earnings impacts relate to earnings on a current cost of supplies basis, attributable to shareholders excluding identified items unless stated otherwise.
Integrated Gas
Production is expected to be between 930 and 960 thousand barrels of oil equivalent per day
LNG liquefaction volumes are expected to be between 9.00 and 9.30 million tonnes
For the third quarter, we expect to deliver strong trading and optimisation performance
Note that more than 80% of our term contracts for LNG sales in 2018 were oil price linked with a price-lag of typically 3-6 months, as per previous disclosures
Note that, as in previous quarters, CFFO in Integrated Gas can be impacted by margining resulting from movements in the forward commodity curves
Upstream
Production is expected to be between 2,600 and 2,650 thousand barrels of oil equivalent per day
During the third quarter there have been additional well write-offs in the range of $250-$350 million compared to Q3 2018, for which no cash impact is expected
Natural Gas Liquids and gas prices continue to be disconnected from Brent compared to Q3 2018
In July, we completed the divestment of the Caesar-Tonga asset and our Upstream interests in Denmark
Downstream
Refinery availability is expected to be between 90% and 92%
Oil Products sales volumes are expected to be between 6,700 and 7,350 thousand barrels per day
Chemicals manufacturing plant availability is expected to be between 90% and 92%
Chemicals sales volumes are expected to be between 3,900 and 4,000 thousand tonnes
We expect chemicals cracker and intermediate margins to be materially unchanged from Q2 2019
In September, we completed the divestment of our interest in the SASREF refining joint venture
Corporate
Corporate earnings excluding identified items are expected to be a net charge between $700 – 850 million, this excludes the impact of currency exchange rate effects
Currency exchange rate movements, including a weakening of the Brazilian Real, is expected to have a negative earnings impact on top of the provided range
Other
As per previous disclosures, price sensitivity at Shell group level is $6 billion per annum per $10 per barrel Brent price movement
Note that this price sensitivity is appropriate for smaller price changes, and is best used for full-year numbers