Shell's Q1 oil production down 8.7%; profits up on brent and asset sales

London, (Quantum Commodity Intelligence) – Energy major Royal Dutch Shell's first-quarter oil production was down 8.7% on the year at 1.579 million bpd, while refinery throughput and marketing sales remained significantly below long-term averages, according to results released by the company Thursday.

The company's adjusted earnings were nonetheless almost tenfold higher than in Q4 at $3.2 billion up from $393 million.

The results were buoyed by higher oil prices and the sale of oil and gas assets in several countries, including Egypt, Canada and Nigeria.

The company's overall refining margin also continued to improve as the Covid demand recovery gathers pace and hit its highest value in the last 5 quarters at $2.69/b.

This, however, remained 45% below the Q1 2020 margin and less than half the margin realised in the preceding years.

Total upstream production including natural gas came in at 2.462 million boe/d, in line with pre-report advice posted earlier this month and up from 2.371 million barrels in Q4 and an average of 2.424 million barrels for the entirety of 2020.

While Q1 production improved on seasonal demand, second-quarter production is expected to be lower as seasonality reverses course and due to divestments, said the report.

Refining throughput was hit by lower intake and utilisation due to lower demand and the impact of the Texas winter storm.

Processing intake in North and South America saw a 24.7% drop between Q4 and Q1, whereas Asia made a softer 6% fall and Europe & Africa was barely changed at 0.1% lower.

Total global throughput was 1.751 million b/d, down 27% on the year and 9.7% on the quarter, but refining utilisation was on par with Q4 last year at 72%.

Marketing sales for the company were 2.22 million b/d, down 11.4% on the year and 5% from Q4.

This is compared to an average sales volume of 2.778 million b/d for the years 2017 to 2019.