Oil giant Shell warns of £2bn blow as it struggles to close the gap with US rivals
Shell warned of a £2billion hit after a weak end to 2024 in a blow to the oil major as it ‘desperately’ tries to close the gap with US rivals.
Boss Wael Sawan last year said he will consider moving the energy giant’s listing to New York if efforts to boost its valuation do not pay off.
The FTSE 100 firm yesterday warned that profits and production in its gas business will be lower in the fourth quarter and said it faced a £1billion charge in its renewables unit.
Russ Mould, investment director at AJ Bell, said the update was ‘disappointing for the market’.
Shell is braced for £1.02billion to £2.4billion in impairments in the quarter, including up to £1billion in its renewables division where it faces a charge ‘related to [the] timing of payments of emissions certificates in Germany and the US’.
It comes after the firm last month said it would step back from new offshore wind investments and split its power division to boost the most profitable parts of the business, to catch up with US giants such as Exxon Mobil and Chevron which have doubled down on fossil fuels.
Profit warning: Shell yesterday warned that profits and production in its gas business will be lower in the fourth quarter and said it faced a £1bn charge in its renewables unit
Shell said trading results in its liquefied natural gas (LNG) division in the fourth quarter would be significantly lower than in the previous quarter due to expiry of hedging contracts.
It is the world’s largest trader of LNG and trimmed its forecast to between 6.8m and 7.2m tons, from 7.5m in the third quarter.
Trading in its chemicals and oil products arm was expected to be significantly lower quarter-on-quarter due to lower demand.
Shares fell 1.4 per cent, or 37.5p, to 2579.5p.
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