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Shell’s Upstream production down due to OPEC+ restrictions

Oil&Gas Materials 30 October 2020 11:33 (UTC +04:00)
Shell’s Upstream production down due to OPEC+ restrictions

BAKU, Azerbaijan, Oct.30

By Leman Zeynalova – Trend:

Compared with the third quarter 2019, total production of Royal Dutch Shell in Upstream segment decreased by 14 percent, mainly due to the impact of OPEC+ restrictions, lower production in the NAM joint venture and severe weather conditions in the US Gulf of Mexico, Trend reports citing the company.

Divestments and field declines were largely offset by new fields and ramp-ups, Shell said in its quarterly report.

“Compared with the first nine months of 2019, total production decreased by 9 percent, mainly due to the impact of lower production in the NAM joint venture and OPEC+ restrictions. Divestments and field declines were largely offset by new fields and ramp-ups mainly in Brazil.

“Third quarter segment earnings amounted to a loss of $1,110 million, which reflected lower prices as a result of unfavourable macroeconomic conditions, as well as lower production volumes mainly driven by OPEC+ restrictions and severe weather conditions affecting US Gulf of Mexico production compared with the third quarter 2019. This was partly offset by comparatively lower well write-offs.

“Segment earnings included impairment charges of $101 million and divestment losses of $100 million. These charges are part of identified items. Compared with the third quarter 2019, Upstream Adjusted Earnings were a loss of $884 million, reflecting lower oil and gas prices as a result of unfavourable macroeconomic conditions, as well as lower production volumes mainly driven by OPEC+ restrictions and severe weather conditions affecting US Gulf of Mexico production.

“This was partly offset by comparatively lower well write-offs. Cash flow from operating activities for the quarter was $2,101 million, primarily driven by Adjusted Earnings before noncash expenses including depreciation,” said the report.

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