Shell fourth quarter 2020 update note - Seite 2

OIL PRODUCTS

• Refinery utilisation is expected to be between 72% and 76%.
• Realised gross refining margins are expected to be slightly improved compared with the third quarter 2020.
• Sales volumes are expected to be between 4,000 and 5,000 thousand barrels per day.
• Marketing results are expected to be in line with the fourth quarter 2019 while significantly lower compared with the record third quarter 2020 due to lower volumes driven by seasonal trends.
• Trading and optimisation results are expected to be significantly lower compared with the third quarter 2020.
• Significant derivatives related outflows have impacted CFFO in the fourth quarter so far, compared with derivatives related inflows at the end of the third quarter 2020. The full quarter impact is subject to movements in commodity prices and forward curves up until the last day of the quarter.
• Working capital movements are typically impacted by movements between the quarter opening and closing price of crude along with changes in inventory volume.

CHEMICALS

• Chemicals manufacturing plant utilisation is expected to be between 77% and 81%.
• Chemicals sales volumes are expected to between 3,600 and 3,900 thousand tonnes.
• Chemicals base and intermediate margins are expected to improve compared with the third quarter 2020.

CORPORATE

• Corporate segment Adjusted Earnings are expected to be a net expense of $900 to $975 million for the fourth quarter, impacted by unfavourable movements in deferred tax positions. This excludes the impact of currency exchange effects.

OTHER

• Higher underlying operating expenses due to increased activity compared to the third quarter 2020 are expected to impact Adjusted Earnings across the businesses.
• As per previous disclosures, CFFO price sensitivity at Shell Group level is estimated to be $6 billion per annum for each $10 per barrel Brent price movement.
• Note that this price sensitivity is indicative and is most applicable to smaller price changes than those in the current environment and in relation to the full-year results. This excludes the short-term impacts from working capital movements and cost-of-sales adjustments.
• Post-tax charges, in aggregate, between $3.5 to $4.5 billion in relation to impairments, asset restructuring and onerous contracts are expected in the fourth quarter. These expected charges, reported as identified items, relate to Upstream (including partial impairment of Appomattox asset in the US Gulf of Mexico due to subsurface updates), Oil Products (including charges related to announced transformation of the refinery portfolio) and Integrated Gas (onerous contracts). As per accounting standards, charges linked to Reshape organisational restructuring  are expected to be recognised in 2021.
• Shell will provide a strategy update on 11 February 2021.