Friday 06 January, 2023
Shell plc
Shell fourth quarter 2022 update note
The following is an update to the fourth quarter 2022 outlook and gives an overview of our current expectations for the fourth quarter. Impacts presented may vary from the actual fourth quarter 2022 results and are subject to finalisation of those results, which are scheduled to be published on February 2, 2023. Unless otherwise indicated, all outlook statements exclude identified items.
Integrated Gas
| Outlook ($ million) | Comment | |
| Adjusted EBITDA: | ||
| Production (kboe/d) | 900 – 940 | Reflecting longer than expected outage of Prelude. |
| LNG liquefaction volumes (MT) | 6.6 – 7.0 | Mainly reflecting longer than expected plant outage at Prelude and operational issues at QGC in Australia. |
| Underlying opex | 1,200 – 1,400 | |
| Adjusted Earnings: | ||
| Pre-tax depreciation | 1,200 – 1,600 | |
| Taxation charge | 500 – 900 | This includes favourable movements in deferred tax positions. |
| Other Considerations: | ||
| Trading & Optimisation: expected to be significantly higher compared to Q3’22. |
Upstream
| Outlook ($ million) | Comment | |
| Adjusted EBITDA: | ||
| Production (kboe/d) | 1,825 – 1,925 | |
| Underlying opex | 2,800 – 3,300 | |
| Profit of joint ventures and associates | (400) – 200 | No storage transfer effects in the quarter, lower gas prices and portfolio effects. |
| Exploration well write-offs | 150 – 550 | |
| Adjusted Earnings: | ||
| Pre-tax depreciation | 3,100 – 3,500 | |
| Taxation charge | 3,100 – 3,900 | This includes favourable movements in deferred tax positions. |
| Other Considerations: | ||
| — |
Marketing
| Outlook ($ million) | Comment | |
| Adjusted EBITDA: | ||
| Sales volumes (kb/d) | 2,350 – 2,750 | |
| Underlying opex | 2,000 – 2,300 | |
| Adjusted Earnings: | ||
| Pre-tax depreciation | 300 – 500 | |
| Taxation charge | 0 – 200 | |
| Other Considerations: | ||
| Marketing results: expected to be lower than Q3’22. |
Chemicals & Products
| Outlook ($ million) | Comment | |
| Adjusted EBITDA: | ||
| Indicative refining margin | $19/bbl | Q3’22: $15/bbl |
| Indicative chemicals margin | $37/tonne | Q3’22: ($27)/tonne |
| Refinery utilisation | 88% – 92% | |
| Chemicals utilisation | 75% – 79% | |
| Underlying opex | 2,800 – 3,200 | |
| Adjusted Earnings: | ||
| Pre-tax depreciation | 700 – 900 | |
| Taxation charge | (200) – 100 | This includes favourable movements in deferred tax positions. |
| Other Considerations: | ||
| Trading & Optimisation: expected to be significantly lower than Q3’22. Chemicals results are expected to be lower than Q3’22 in part due to the commencement of depreciation for Shell Polymers Monaca (the Pennsylvania Chemicals project). |
Renewables and Energy Solutions
| Outlook ($ million) | Comment | |
| Adjusted Earnings | (500) – 100 |
Corporate
| Outlook ($ million) | Comment | |
| Adjusted Earnings | (550) – (750) |
Shell Group
| Outlook ($ million) | Comment | |
| CFFO: | ||
| Tax Paid | 4,300 – 4,700 | |
| Working Capital | Working capital estimations are inherently uncertain, exacerbated by current market volatility. We estimate a working capital inflow of ~$4 billion for the quarter. | |
| Other Considerations | ||
| The Q4’22 earnings impact of recently announced additional taxes in the EU (the solidarity contribution) and the deferred tax impact from the increased UK Energy Profits Levy is expected to be around $2 billion. These impacts will be reported as identified items and therefore will not impact Q4’22 Adjusted Earnings and will have limited cash impact in Q4’22 given the expected timing of payments. |
Guidance
For guidance on Indicative Refining Margin, Indicative Chemicals Margin and full-year price and margin sensitivities see the Q3 2022 Quarterly Databook (Link).
Consensus
The consensus collection for quarterly Adjusted Earnings, Adjusted EBITDA is per the new reporting segments and CFFO at a Shell group level, managed by Vara Research, is expected to be published on 26 January 2023.
Enquiries
Media International: +44 (0) 207 934 5550
Media Americas: +1 832 337 4355