Corrected: Shell Q4 chemicals earnings slump to $98m on Moerdijk outages

Correction: In the ICIS story headlined “Shell Q4 chemicals earnings slump to $98m on Moerdijk outages” dated 29 January 2015, please note that the Q4 and full-year net profit figures in the ninth paragraph have been amended following a corrected earnings statement from Shell. A corrected story follows…

(adds further detail on Shells chemicals earings throughout)

LONDON (ICIS)–Shell’s chemicals earnings slumped to $98m in the fourth quarter of 2014 from $350m a year earlier on a current cost of supply (CCS) basis as plant outages at its Moerdijk site in the Netherlands bit into capacity availability, the energy giant said on Thursday.

The Anglo-Dutch major earned $456m from its chemicals businesses in the third quarter of 2014.

Shell’s 910,000 tonne/year cracker and other units at Moerdijk were off line from early October and the cracker outage is expected to run well into 2015.

Chemical sales volumes in the December quarter declined 12% year on year to 3.90m tonnes.

“Chemicals manufacturing plant availability decreased to 85% from 92% in 2013, mainly reflecting the impact of unit shut-downs at the Moerdijk chemical site in the Netherlands,” Shell said in Thursday on release of its Q4 and full-year 2014 earnings.

Shell’s full-year 2014 chemicals earnings were down 23% at $1.42bn.

The major outage has led to an unusual agreement between Shell and Versalis. The Italian chemical company confirmed this month that it would restart its cracker at Porto Marghera in Italy to provide temporary support for Shell’s loss of ethylene and propylene supply.

Shell’s downstream operations posted Q4 CCS earnings of $1.55bn compared with $558m in the previous corresponding period, partly on improved margins, the company said. Refining margins improved in most regions.

The company’s overall Q4 net profit shrank 67% year on year to $595m, but CCS earnings surged 93% to $4.16bn. Full-year net profit fell 9.1% at $14.9bn, while CCS earnings increased 14% to $19.0bn.

Shell has announced a $15bn capital spending cut in the face of the lower oil price.

Additional reporting by Pearl Bantillo