Shell expects to book up to $2 billion in post-tax impairments after delaying construction of a major biofuels plant as European energy majors grapple with weak market conditions, while trading in its core gas division is set to fall, The Wall Street Journal reports.
The energy giant announced Friday that it expects to book an impairment after tax of between $1.5 billion and $2 billion mainly due to pausing construction of its biofuels facility in Rotterdam, as well as the divestment of its chemicals refinery in Singapore.
The paused construction of the Dutch biofuels plant—one of Europe’s largest, set to produce 820,000 metric tons of biofuels a year—was largely due to weak European market conditions, with profit margins squeezed by a large drop in U.S. renewable fuel-credits prices.
The company has narrowed its segment’s liquids and natural-gas production outlook slightly upward to 940,000 to 980,000 oil-equivalent barrels a day for the quarter, from a previously guided range of 920,000 to 980,000 BOE a day.
Shell, the world’s largest liquefied natural gas trader, expects its quarterly LNG volumes to be between 6.8 million and 7.2 million metric tons, compared with the prior year’s 7.2 million tons.
