Shell expects ‘significantly lower’ trading in gas business

Energy giant Shell has warned that trading from its gas division is set to be “significantly lower” for the past three months compared with the previous quarter.

The London-listed oil and gas firm said trading was affected by seasonal factors in the second quarter of 2023.

Nevertheless, it stressed that the performance from the gas operation would be in line with trading from the second quarter of 2022 and 2021.

It came as the company also reported 3 billion dollars (£2.4 billion) of writedowns for the second quarter of this year, largely due to a 1% increase in the discount rate used for impairment testing.

The update comes three weeks before the oil major will reveal its full performance and profitability for the quarter.

On Friday, it also told shareholders in the short update that it expects an adjusted corporate loss of between 600 million dollars and 800 million dollars for the quarter.

The group’s upstream business – which includes exploration and production of crude oil and natural gas – is on track to deliver adjusted earnings of between 2.5 billion dollars and 2.8 billion dollars.

Shell said it expects the trading performance of its chemicals and products business to also be lower in the latest quarter, compared to the start of the year.

It comes a day after the firm’s boss warned that slashing oil and gas production now would be “dangerous and irresponsible” and could see energy bills rocket higher again.

Chief executive Wael Sawan told the BBC the world still “desperately needs oil and gas” because the switch to renewable energy is not happening fast enough to replace it.