(Alliance News) -Â Royal Dutch Shell PLC on Wednesday guided to a hit of up to USD200 million to first quarter earnings from the Texas winter storm.
In February, a historic winter blast knocked out power for millions in oil-rich Texas and also resulted in water problems across the state. Shell said the hit will be concentrated on the Upstream, Oil Products and Chemicals divisions, with the fallout to Integrated Gas limited.
For the first quarter of 2021, Integrated Gas production is expected to be around 920,000 to 960,000 barrels of oil equivalent per day.
"Operational and net financial impact from the Texas winter storm is expected to be limited as trading margins are offset by provisions due to related counterparty credit risk," Shell said of the Integrated Gas unit.
Upstream earnings are expected to be positive in the first quarter, boosted by the current commodity price environment, but the Texas freeze will hit the result by up to USD40 million. Shell posted an adjusted loss in Upstream of USD2.85 billion for 2020 versus earnings of USD4.45 billion in 2019.
Upstream production is expected to be between 2.40 million and 2.48 million barrels of oil equivalent per day, including 10,000 to 20,000 barrels per day lower production due to the Texas storm.
Oil Products is expected to see a hit of up to USD80 million to earnings from the cold weather in Texas, while Chemicals should see a USD60 million knock.
Shell shares were 0.9% higher at 1,438.00 pence each in London on Wednesday morning.
By Lucy Heming;Â lucyheming@alliancenews.com
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