The British energy giant now expects LNG output for the quarter to range between 6.4 million and 6.8 million metric tons, a drop from its earlier forecast of 6.6 million to 7.2 million tons. For comparison, Shell produced 7.1 million metric tons of LNG in the final quarter of 2023.
The lower guidance is primarily attributed to cyclones and unplanned maintenance activities affecting operations in Australia. Specifically, Shell’s Prelude floating LNG facility in Western Australia faced loading delays in February due to extreme weather conditions.
Despite the production setback, Shell indicated that trading results from its gas division are expected to remain consistent with the previous quarter.
In addition to the revised production figures, the company also disclosed plans to book a $100 million exploration write-off for the quarter. While a Shell spokesperson confirmed the write-off, they declined to provide further details.
Shell’s marketing segment is also expected to take a hit, with reduced contributions from its speciality products and services business. This division includes the company’s low-carbon energy solutions for the aviation and marine industries, a key area in Shell’s energy transition strategy.
Furthermore, the company narrowed its broader oil and gas production forecast to between 1.79 million and 1.89 million barrels of oil equivalent per day (boed). The updated range is slightly more conservative than the earlier guidance of 1.75 million to 1.95 million boed.
As the global energy landscape continues to navigate price volatility and climate-related disruptions, Shell’s Q1 update underscores the operational challenges faced by major producers—particularly in weather-sensitive regions like Australia. Investors and analysts will be closely watching the full results on May 2 for further insight into Shell’s strategic response and earnings trajectory.