The Hague-based LNG giant Shell saw its second-quarter net profit drop on lower realized oil, gas and LNG prices.
The company reported a net profit of $3.5 billion for the second quarter of 2019, 42 percent below the figures reported in the corresponding quarter of 2018.
Lower realized oil, gas and LNG prices, weaker realized chemicals and refining margins, as well as higher provisions, were partly offset by improved production, Shell said in its statement.
Royal Dutch Shell CEO Ben van Beurden said, “we have delivered good cash flow performance, despite earnings volatility, in a quarter that has seen challenging macroeconomic conditions in refining and chemicals as well as lower gas prices. This quarter we achieved some key milestones, such as the start-up of Appomattox and the first LNG cargo from Prelude. These add to our competitive portfolio, which is expected to generate additional cash in the coming quarters.”
Shell’s Integrated Gas business reported a significant slip in earnings compared to the corresponding quarter, from $3.3 billion in the second quarter of 2018 to $1.3 billion during the period under review.
Compared with the second quarter 2018, Integrated Gas earnings reflected lower realized oil, gas and LNG prices, decreased production, the impacts following the Heads of Agreement with the government of Trinidad and Tobago as well as tax provisions.
Total production was 3 percent lower compared with the second quarter 2018, mainly due to divestments and the transfer of the Salym asset into the Upstream segment, partly offset by production from field ramp-ups in Australia and Trinidad and Tobago.
LNG liquefaction volumes increased by 2 percent compared with the second quarter of 2018, benefiting from higher feedgas availability, partly offset by divestments.
Volumes reached 8.66 million tonnes in the quarter under review, 2 percent above the 8.46 million tons in the second quarter of 2018.
LNG sales volumes have remained flat, reaching 17.95 million tonnes, compared to 17.97 million tonnes in the first quarter of 2018.