Shell’s second quarter production rose 4% on year but saw sharply weaker earnings for the period on lower oil and gas prices and thinner refining margins, the company said Thursday. Oil and gas production in the second quarter of 2019 was 3.58 million b/d of oil equivalent, mainly due to field ramp-ups in North America and the transfer of its Salym asset from the Integrated Gas segment.
During the quarter, Shell started up its Appomattox field in the US Gulf of Mexico and saw the first LNG cargo from its Prelude project. Shell, which does not give production targets, said it expects production to grow by some 50,000 – 100,000 boe/d in the third quarter from year-ago levels.
Cash flow from operating activities in the quarter was $11 billion, up from $9.5 billion in the year ago period, with free cash flow at $6.9 billion. “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,” CEO Ben van Beurden said in a statement.
On a current cost of supplies basis, Shell’s Q2 earnings, excluding one-time items, were $3.5 billion, down 26% from $4.7 billion in Q2 2018. Downstream, Shell reported a 19% fall in clean sector earnings reflecting lower realised refining margins mainly in the US Gulf Coast and Europe. Platts.com