Shell has guided to a mixed bag of results for the fourth quarter of 2021, with operational headwinds mitigated by a promise to continue share buybacks "at pace".

The firm has narrowed its estimate for fourth-quarter upstream oil and gas production following an unplanned shutdown at the 3.6mn t/yr Prelude floating LNG offshore Western Australia in early December. It now expects to report production of 3.06mn-3.2mn b/d of oil equivalent (boe/d) for October-December, compared with previous guidance of 3.04mn-3.33mn boe/d. The company produced 3.37mn boe/d in the fourth quarter of 2020.

Despite the setback at Prelude, Shell expects "trading and optimisation results" from its Integrated Gas business to be "significantly higher" in October-December than the previous three months. It said it managed to overcome the ongoing supply issues and capture "unique optimisation opportunities generated through the large scale and scope of our LNG trading portfolio in the prevailing high LNG spot price environment".

In the downstream, Shell said it expects its realised refining margins to have been adversely impacted in the fourth quarter by "Hurricane Ida recovery efforts" at the 225,000 b/d refinery in Norco, Louisiana, and by extended maintenance at the Scotford refinery in Canada.

It expects marketing results to be in line with the fourth quarter of 2020 but lower compared with the third quarter of 2021 because of seasonal trends, the demand impact of the Omicron Covid-19 variant and foreign exchange impacts in Turkey. Oil products trading results are expected to be "significantly lower" in October-December than in the third quarter, it said.

On shareholder distributions, Shell has reaffirmed its commitment for an additional $7bn of share buybacks funded through the $9.5bn sale of its Permian basin assets to US firm ConocoPhillips. The firm launched the first $1.5bn tranche of the $7bn programme last month. "The remaining $5.5bn of proceeds from the Permian divestment will be distributed in the form of share buybacks at pace," it said today.

Shell will publish its fourth-quarter and full-year 2021 results on 3 February.

By Konstantin Rozhnov

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Argus Media Limited published this content on 07 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 January 2022 12:57:01 UTC.