Shell will take a hit of up to £3.5billion on its business in Singapore but said earnings from gas trading soared in the fourth quarter.
The energy giant is trying to sell the refining and chemicals hub in south-east Asia after launching a strategic review last year.
In an update yesterday, it said it was facing writedowns of £2billion to £3.5billion for the final three months of 2023, mainly related to a refinery and ethylene plant on Singapore’s Bukom and Jurong islands.
Chinese chemical producers Eversun and Befar, state-run China National Offshore Oil Corporation and Dutch energy trader Vitol are in the running to buy the assets.
Shell has asked for bids by the end of February before finalising a takeover this year.
Shell is trying to sell the refining and chemicals hub on Singapore’s Bukom (pictured) and Jurong islands after launching a strategic review last year
But while the troubles go on in Singapore, Shell said gas trading expected to be ‘significantly higher’ in the quarter compared to the previous three months.
Its improved performance was due to higher demand for gas during the winter and ‘increased optimisation opportunities’.
Shell’s gas trading business has been boosted since Russia’s invasion of Ukraine in early 2022 pushed up prices.
Meanwhile, it warned investors that its chemicals and products division is expected to swing to a loss in the fourth quarter. The company will announce fourth quarter results on February 1.
AJ Bell investment director Russ Mould said: ‘Shell has been a beneficiary of higher commodity prices over the approximate two years which have followed Russia’s invasion of Ukraine.
It needs to show it can deliver when market conditions aren’t so helpful.’
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