Page 5 - EurOil Week 28 2021

EurOil COMMENTARY EurOil

Shell is divesting from a
refinery in Germany.

to reach a recent high of between 75 and 79%, While seeking to improve investor returns,
versus 72% in the previous three months. Shell has also vowed to fast-track its energy tran-
Oil product sales are expected to come sition plans after a recent Dutch court ruling that
to somewhere between 4 and 5mn barrels of the Anglo-Dutch major’s targets for reducing
oil equivalent per day, which compares with emissions are not ambitious enough.
4.164mn boepd in Q1. Shell also expects stable
chemicals margins in the second quarter, with Refinery sale
chemicals sales slated to amount to 3.5-3.8mn As part of its transition plans, Shell wants to
tonnes, versus 3.58mn tonnes in Q1. scale back the number of refineries it has from
Upstream, the company expects produc- 17 to under 10, while more closely integrating
tion to average 2.225-2.3mn boepd, down its remaining sites with its chemicals and trading
from 2.462mn boepd in the first quarter. It also division. The major announced on July 8 it was
warned that any positive currency effect would offloading a 37.5% non-operated shareholding
be offset by higher underlying operating expend- in the PCK Schwedt oil refinery in Germany.
iture because of increased planned maintenance. Shell has clinched a deal to sell its stake in
It added it would incur some $3.2-3.5bn in pre- the 220,000 barrel per day (bpd) refinery to Alc-
tax depreciation costs and a $500-900mn tax mene, part of Estonia’s Liwathon Group. The
charge. transaction is set for closure by the end of this
As for its integrated gas business, Shell said year, although the plant’s other shareholders
it anticipated underlying operating expendi- Rosneft, with 54.2%, and Eni, with 8.33%, have
ture being $400-500mn lower than in Q1. On pre-emptive rights to Shell’s stake. The price tag
the other hand, output is anticipated to average of the sale was not disclosed.
900,000-960,000 boepd, down from 967,000 “This is yet another milestone in our jour-
boepd. Liquefaction volumes are projected ney towards a reduced refining portfolio,” Shell
to come to 7.1-7.7mn tonnes, dropping from said. “This sale supports the shift of Shell’s refin-
8.16mn tonnes in the previous three months ing portfolio, which includes the development
owing to unplanned maintenance. of the high-value energy and chemicals park
Those outages also mean Shell’s trading and Rheinland.”
optimisation results will be significantly weaker This park is where Shell commissioned earlier
than usual, the company warned, although the this month Europe’s biggest polymer electrolyte
numbers will be similar to those in Q1. It also membrane (PEM) electrolyser for develop-
expects to book $1.3-1.4bn in pre-tax depreci- ing green hydrogen. The facility has a 10-MW
ation costs and a $300-400mn taxation charge capacity that could be upscaled to 100 MW in
from its integrated gas business. the future. ™

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