Shell first quarter 2020 update note

The Hague, March 31, 2020 - This is an update to the first quarter 2020 outlook provided in the fourth quarter results announcement on January 30, 2020. The impacts presented here may vary from the actual results and are subject to finalisation of the first quarter 2020 results.

Unless otherwise indicated, presented earnings impacts relate to earnings on a current cost of supplies basis, attributable to shareholders, excluding identified items.

Integrated Gas

• Production is expected to be between 920 and 970 thousand barrels of oil equivalent per day, this includes the additional volumes from the Egypt offshore assets that were previously reported in the Upstream segment
• LNG liquefaction volumes are expected to be between 8.8 and 9.2 million tonnes
• Dividend payments from joint ventures and associates are expected to be lower than in other quarters, as is typically the case in the first quarter
• Trading and optimisation results are expected to be average and approximately in line with the fourth quarter 2019
• More than 90% of our term contracts for LNG sales in 2019 were oil price linked with a price-lag of typically 3-6 months
• CFFO in Integrated Gas can be impacted by margining resulting from movements in the forward commodity curves. At the time of issue, we expect margining inflows not significantly different from those received in the fourth quarter 2019

Upstream

• Production is expected to be between 2,650 and 2,720 thousand barrels of oil equivalent per day, this includes the impact from the transfer of the Egypt offshore assets to the Integrated Gas segment and the transfer of Oil Sands to the Oil Products segment
• Upstream margins are impacted by the weak macro environment. Upstream results, excluding identified items, are also negatively impacted by the effects of a weak Brazilian Real on taxation, a non-cash item

Oil Products

• Refinery utilisation is expected to be between 80% and 84% with availability expected to be between 93% and 96%
• Refining margins are expected to be weaker compared with the fourth quarter 2019
• Oil Products sales volumes are expected to be between 6,000 and 7,000 thousand barrels per day
• Marketing margins in the first quarter are expected to remain strong, as the impact on demand from COVID-19 is not expected to be significant at the Shell Group level in the first quarter
• A material working capital release is expected largely driven by the change in quarter-end prices impacting inventory values
• CFFO excluding working capital movements is expected to be impacted by the higher cash cost of sales
• In February, we completed the divestment of the Martinez refinery

Chemicals