Royal Dutch Shell said it expected it expected third quarter cash flow to be “significantly” impacted by surging gas and electricity prices.
The company added on Thursday that it would take a $400m hit to earnings from Hurricane Ida which hit the Gulf of Mexico in August.
A squeeze on supply coupled with a post-pandemic surge in demand has seen gas and electricity prices rise around the world.
In a trading update ahead of third quarter results, Shell said liquefaction in the quarter was expected to be 7 – 7.5m tonnes due to feedgas constraints and additional maintenance.
Cash flow was expected to be “significantly impacted by large variation margin inflows on the back of the prevailing gas and electricity price environment” Shell said, adding that inflows were expected to be higher than the second quarter.
Uptream oil and gas production fell in the quarter to between 2.025m – 2.1m barrels of oil equivalent per day (boed) due a 90,000 boed fall in production after Hurricane Ida.
