Shell recently released its forecast for the second quarter of 2024, indicating changes in the production volumes of its various units. The Upstream unit could see its production increase to 1.63-1.83 million barrels per day of oil equivalent (boe/d), compared to 1.70 million boe/d in the second quarter of 2023. On the other hand, the Shell’s integrated Liquefied Natural Gas (LNG) unit forecasts a decline, with production estimated between 920,000 and 980,000 boe/d, compared to 985,000 boe/d in the same period last year.
Overall performance and influencing factors
In the first quarter, Shell’s overall production was flat year-over-year at 2.91 million boe/d. This consistency is supported by a 2% increase in gas production, while oil production fell slightly by 1%. However, a new connection project, the Rydberg to the Appomattox oil hub in the Gulf of Mexico, began in February and is expected to reach production of 16,000 b/d at its peak.
Impact of maintenance activities
Shell also cited the impact of maintenance on its second-quarter production forecast, although the company benefited from less maintenance activity at its previously trouble-prone Prelude floating LNG facility in Australia. techniques.
First quarter financial and operational results
Shell CFO Sinead Gorman highlighted the strong start to 2024, adding that: “We have once again delivered a strong set of operational and financial results in the first quarter. In the Upstream segment, our conventional oil and gas business performed very well, with many key assets providing high controllable availability. »
The Platts Dated Brent North Sea benchmark averaged $83.16 in the first quarter of 2024, up from a year earlier.
Downstream sector performance
In the downstream sector, Shell refinery utilization reached 91% in the first quarter, up from 81% in the fourth quarter of 2023, driven by a reduction in planned maintenance in North America. Refinery input edged up 1% year-on-year, and the company’s indicative refining margin increased quarter-on-quarter, although lower than the prior year level.
Shell’s 2024 forecast indicates strategic adaptation in the face of a dynamic market environment, with efforts to maximize production while managing operational challenges. This balanced management positions the company to respond effectively to market fluctuations while pursuing its long-term objectives.
