News wire — Royal Dutch Shell said on Friday it expected to write down up to $2.3 billion in the fourth quarter, the latest major energy company forced to shrink estimates for sector values due to a weaker economic outlook.
In a trading update ahead of full year results, Shell also lowered its oil products sales forecast, pointing to the first annual slowdown in sales since at least 2014, while maintaining spending on the lower end of forecasts.
The Anglo-Dutch company warned in October that trade tensions between the United States and China, the world’s two largest energy consumers, could hurt demand and take a toll on its performance.
Shell said it expected to take post-tax impairment charges in a range between $1.7 billion and $2.3 billion for the quarter “based on the macro outlook”. It did not say which assets the impairments relate to.
Since October, rivals Chevron, BP, Equinor and Spain’s Repsol all wrote down a total of around $20 billion, primarily in U.S. shale gas assets due to lower long-term gas prices.
The impairment will likely increase Shell’s debt ratio, or gearing, which the company has struggled to reduce in recent years.
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- Reuters