Shell may face an impairment loss of up to $2 billion on its Rotterdam and Singapore plants.

• Shell has temporarily halted on-site construction at its 820,000 metric tons per year biofuels facility in Rotterdam due to current market conditions.
• The company anticipates that the second-quarter performance of trading and optimization in the core gas division will be the same as the second quarter of the previous year, but below the first quarter of 2024, due to seasonality.

The energy giant announced on Friday that it anticipates a post-tax impairment loss of up to $2 billion, primarily due to its Singapore and Rotterdam plants, and also stated that its key gas division's trading will decrease in the quarter.

Shell has announced a temporary suspension of on-site construction at its 820,000 metric tons a year biofuels facility in Rotterdam due to current market conditions. This has led the oil company to project a non-cash post-tax impairment of between $600 million and $1 billion for the Rotterdam hub when it publishes second-quarter results on Aug. 1.

The oil major expects a second non-cash post-tax impairment of $600-800 million following its May agreement to divest its Singapore refining and chemicals plant.

The company anticipates that the second-quarter performance of trading and optimization in the core gas division will be the same as the second quarter of the previous year, but below the first quarter of 2024, due to seasonality.

"Analysts at RBC Capital Markets stated in a Friday note that the release has something for everyone, with core areas and operations meeting expectations, upstream production being stronger than anticipated, and oil trading surprising to the upside."

The downside is that RBC flagged "higher corporate costs and a neutral result from the chemicals division."