Shell Projects $2B Post-Tax Impairment Amid Market Adjustments

Shell (SHEL:US) announced on Friday that it anticipates a post-tax impairment of up to $2 billion, primarily associated with its Singapore and Rotterdam plants. Additionally, the company noted a decline in trading within its key gas division for the quarter.

Earlier in the week, Shell disclosed that it would temporarily halt on-site construction at its Rotterdam biofuels facility, which has a capacity of 820,000 metric tons per year, due to current market conditions. This suspension is expected to result in a non-cash post-tax impairment of $600 million to $1 billion for the Rotterdam hub, to be reported in the company's second-quarter results on August 1.

Moreover, Shell foresees another non-cash post-tax impairment of $600 million to $800 million following the divestment of its Singapore refining and chemicals plant in May.

The company also projected that its second-quarter trading and optimization performance in the core gas division would be comparable to the same period last year but lower than the first quarter of 2024, attributing this to seasonal factors.

In a Friday report, RBC Capital Markets analysts noted that the release offered mixed signals. They highlighted that liquefied natural gas volumes were as anticipated, upstream production exceeded previous guidance, and oil trading performed better than expected. However, they highlighted higher corporate costs and a neutral outcome from the chemicals division.

On the congressional trading front, representatives Ro Khanna and Michael McCaul were both seen trading the British oil and gas firm in recent months.