AInvest Newsletter
Daily stocks & crypto headlines, free to your inbox
Shell Announces Potential $2 Billion Impairment on Asian Facilities
ByAinvest
Friday, Jul 5, 2024 2:09 am ET1min read
Shell plc will take a $2 billion writedown on its Singapore and Rotterdam plants due to the decline in chemical prices. The company, active in crude oil refining and renewable energy production, operates a global network of over 47,000 service stations, with significant sales in Europe, Asia, the United States, and beyond. Shell's diverse portfolio includes refining, petrochemical production, and electricity generation from renewable sources.
Shell plc (SHEL.L), a global energy giant, has announced a significant writedown on its Singapore and Rotterdam plants. The company, which operates a diverse portfolio of businesses including crude oil refining, renewable energy production, and petrochemical manufacturing, is set to incur a pre-tax impairment charge of approximately $2 billion [1].
The writedown is mainly attributed to the decline in chemical prices, which has impacted Shell's assets in Singapore and Rotterdam. Shell had previously announced a strategic review of its Singapore refining and chemicals hub, which includes a 237,000 barrels per day (bpd) refinery and a one million metric ton per year (tpy) ethylene plant [1][2]. The company is now looking to sell these assets to a joint venture formed by Indonesia's Chandra Asri and Glencore [2].
Despite the impairment charge, Shell's fourth-quarter results are expected to show higher gas trading and upstream production compared to the previous quarter [1]. The company's chemicals & products division, however, is anticipated to post an adjusted earnings loss for the period [1].
Shell's decision to sell its assets in Singapore and focus on its most profitable ventures is part of its plan to lower its overall carbon footprint. The buyers of these assets, including the refinery and ethylene plant on Bukom Island and a mono-ethylene glycol producing plant on Jurong Island, will gain access to one of the world's leading oil refining and trading centers [2].
References:
[1] Reuters. Shell flags quarterly impairment charges up to $4.5 bln. January 8, 2024. https://www.reuters.com/markets/commodities/shell-flags-quarterly-impairment-charges-up-45-bln-2024-01-08/
[2] Finance.yahoo.com. Shell sells off Singapore refinery, petrochemical assets to joint venture. January 8, 2024. https://finance.yahoo.com/news/shell-shel-sell-off-singapore-165600769.html
Ainvest News articles are AI-generated using advanced large language model (LLM) technology designed to analyze and synthesize publicly available data and news. While AI tools assist in producing initial drafts and insights, all AI generated content published on Ainvest is subject to comprehensive human editorial review before publication. A designated human editor reviews, verifies, and approves each article for factual accuracy, coherence, and compliance with AInvest Fintech Inc’s editorial and disclosure standards.
Despite these review procedures, the information provided may still contain inaccuracies, incomplete data, or time sensitive references due to the inherent limitations of AI generated analysis and evolving changes. The material is provided strictly for informational and educational purposes and does not constitute personalized investment, legal, or financial advice. Readers should independently verify all facts, figures, and statements before making any decision based on this content.
AInvest Fintech Inc. its affiliates, and partners accept no liability or responsibility for any direct or consequential losses arising from reliance on this content. All articles and analyses are subject to revision, update, or removal without prior notice to maintain accuracy and integrity in our publications.
Comments
No comments yet