Shell's US$2.3b write-off is good governance
But it also implies bleak outlook for oil refineries
[SINGAPORE] Shell's US$2.3 billion write-off of some refinery assets - mostly for its Singapore Bukom refinery and basically an accounting move - "reflects good corporate governance" by the super major, "but it also implies that the outlook for oil refineries is pretty bleak", said an industry veteran. That appears to be the key message from the latest Shell move, he told The Business Times.
Intended to strengthen the group's competitiveness amid global refining overcapacity, changing product demand and new supplies from liquid-rich shales, the write-offs, "in the case of Singapore, the future value just did not support the book (value)", explained Shell's CFO Simon Henry.
On this, the industry veteran concurred that "if Bukom is not generating book value, it is the obligation of the Shell board to reflect its correct value", adding: "It reflects good corporate governance by the group as Bukom is a big asset."
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
New Articles
HDB resale prices up 1.8% in Q1; rental market slows down
Digital Core Reit Q1 distributable income slips 2.4% to US$10.6 million
BT subscribers can now share 5 premium articles a month with unlimited number of non-subscribers
First Reit reports 3.2% lower Q1 DPU of S$0.006 amid interest rate, forex headwinds
Vietnam holds first gold auction in 11 years to stabilise market
How Hudson Yards went from ghost town to office success story