KEY POINTS
- Shell lowers LNG production forecast due to cyclones and maintenance.
- The company expects a $100 million exploration write-off in the quarter.
- Shell revises its oil and gas output forecast for the first quarter.
Shell (SHEL.L) has lowered its first-quarter liquefied natural gas (LNG) production forecast, citing the impact of severe weather conditions in Australia.
The British energy giant now expects LNG output to reach between 6.4 million and 6.8 million metric tons, down from a previous projection of 6.6 million to 7.2 million tons. Shell had produced 7.1 million tons of LNG in the fourth quarter of 2023.
Production impacted by cyclones and unplanned maintenance
The company explained that the reduction in output was primarily due to cyclones and unplanned maintenance in Australia. Shell also reported that its gas division trading results are expected to be in line with the previous quarter.
In February, Shell had already postponed some loading at its Prelude floating LNG facility in Western Australia due to challenging weather conditions.
Exploration write-off and revised production outlook
In addition to the lower LNG output, Shell anticipates a $100 million exploration write-off in the quarter, Reuters reported. The company also revised its integrated gas division’s production outlook to 910,000-950,000 barrels of oil equivalent per day (boed), down from 930,000-990,000 boed.
The forecast for upstream oil and gas output was also narrowed to between 1.79 million and 1.89 million boed, down from a previous estimate of 1.75 million to 1.95 million boed.
