BAKU, Azerbaijan, July 29. Total oil and gas production by Royal Dutch Shell in the Integrated Gas segment, compared with the first quarter 2022, increased by 5 percent in Q2 2022 due to lower maintenance in Pearl GTL and Prelude, partly offset by the derecognition of Sakhalin-related volumes, Trend reports with reference to the company.
LNG liquefaction volumes decreased by 4 percent mainly due to the derecognition of Sakhalin-related volumes, partly offset by lower maintenance.
Segment earnings, compared with the first quarter 2022, mainly reflected higher production (increase of $109 million, post-tax), more than offset by the net of lower trading and optimization results and assets realizing higher prices (decrease of $296 million, post-tax). Second quarter 2022 segment earnings included impairment reversals of $2,508 million, gains of $1,979 million due to the fair value accounting of commodity derivatives primarily due to gas price developments, partly offset by charges of $326 million due to provisions for onerous contracts.
As part of Shell's normal business, commodity derivative hedge contracts are entered into for mitigation of economic exposures on future purchases and sales. As these commodity derivatives are measured at fair value, this creates an accounting mismatch over periods. These gains and losses are part of identified items. Adjusted Earnings and Adjusted EBITDA were driven by the same factors as the segment earnings and adjusted for identified items. Cash flow from operating activities for the quarter was primarily driven by Adjusted EBITDA, variation margins cash inflows, the positive impact of timing differences between cash flows of derivatives and physical transactions, and working capital inflows, partly offset by tax payments.
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