Shell sees year-over-year drop in Q2 oil and gas output

Shell's oil and gas output in the second quarter was lower year over year in both its upstream unit and its LNG-focused Integrated Gas unit, it said July 7, highlighting maintenance and the sale of its Nigerian onshore operations.

Production and liquefaction in the Integrated Gas unit could be stable compared with Q1 2025 when Shell reports finalized results on July 31 -- its initial estimates are ranges rather than outright numbers. However, production levels across Upstream and Integrated Gas in Q2 2025 are both set to be below the 2024 annual average, in what can be a peak season for maintenance.

Shell said it would report production from the Upstream unit in the range of 1.66 million-1.76 million boe/d in Q2, down from 1.78 million boe/d a year earlier. It will report production from the Integrated Gas unit in the range of 900,000-940,000 boe/d, down from 980,000 boe/d a year earlier, and liquefaction volumes of 6.4 million-6.8 million mt, down from 6.95 million mt a year earlier.

Shell announced the completion of the sale of its Nigerian onshore oil business to the Renaissance consortium on March 13. Production at the Nigerian assets had fallen to around 100,000 b/d of oil equivalent as of early 2024, Platts reported earlier. Shell has continued investing in its Nigerian deepwater business, with a final investment decision on the Bonga North project taken in December 2024.

The new guidance on production and liquefaction is broadly in line with that provided at Shell's Q1 results presentation, although the ranges have been narrowed, with a slight raising of the lower limit to its guidance on Upstream production.

Shell had achieved a 2% annual increase in its overall oil and gas production in 2024, after several years of declines.

Downstream improvement

Shell reported firmer refinery margins and activity in the second quarter, with an indicative refining margin for the business of $8.9/b in Q2, its highest since Q1 2024, and up from $7.72/b a year earlier, and $6.21/ in Q1 2025. It also upgraded its estimate of refinery utilization in Q2 2025 compared to an earlier guidance, to a range of 92%-96%, compared with 85% utilization in Q1 2025 and an earlier guidance for the second quarter of 87%-95%.

It added that trading and optimization results were set to be significantly lower than in Q1 2025.

The Platts North Sea benchmark Dated Brent averaged $67.88/b in Q2 2025, with prices swinging by almost $20 in a relatively volatile quarter, compared with an average of $84.97/b in Q2 2024.