Shell has taken a £446 million hit from cancelling a major biofuels project in Rotterdam, despite reporting stronger performance elsewhere. The FTSE 100 oil giant saw shares rise on Tuesday morning after updating investors on its third-quarter performance.
The company's oil and gas trading operation delivered significantly higher results in the third quarter compared to the previous quarter. Shell reported production guidance of 910,000 to 950,000 barrels of equivalent per day of gas for the latest quarter.
Production targets raised
Shell lifted its production guidance for liquified natural gas (LNG) over the quarter. The company now expects to produce between seven million and 7.4 million metric tonnes, up from its previous prediction of 6.7 million to 7.3 million.
The group expects to deliver adjusted earnings of around £3.2 billion for the third quarter when it publishes detailed figures at the end of the month. This performance comes despite the substantial impairment from the cancelled Rotterdam project.
Project cancellation details
Shell confirmed last month that plans to develop a biofuels site in Rotterdam had been scrapped after spending around a year on pause due to technical issues. The 600 million dollar non-cash impairment reflects the company's write-off of investments in the failed project.
The company also faces additional pressure from its Brazilian operations, which will knock between £149 million and £298 million off earnings. These operational challenges highlight the mixed performance across Shell's global portfolio.
Sources used: "PA Media" Note: This article has been edited with the help of Artificial Intelligence.
