Shell PLC on Monday narrowed its production outlook for the fourth quarter of 2023, as it anticipated paying less tax but significantly higher impairment charges.

The London-based oil major said that it expected between $2.5 billion and $4.5 billion in impairment charges for the quarter, compared to the $700 million it reported for the fourth quarter of 2022.

Shell said the impairments for the most recent quarter are driven by portfolio choices, such as its Singapore Chemicals & Productions assets, which Reuters had reported Shell plans to sell by the end of 2024.

Further, it expects to pay between $3.4 billion and $4.2 billion in tax for the fourth quarter of 2023, down from $4.37 billion in 2022’s final quarter.

For Integrated Gas, Shell expects production of 880,000 to 920,000 barrels of oil per day, compared to 917,000 a year prior. Trading and optimisation in the division is expected to be ‘significantly higher’ than the prior quarter, due to ‘seasonality and increased optimisation opportunities.

For Upstream, it expects production between 1.83 and 1.93 million barrels of oil equivalent per day, a narrowed outlook range from 1.75 million to 1.95 million barrels it gave for the fourth quarter of 2023 back in November. In the fourth quarter of 2022, Upstream had produced 1.86 million barrels of oil per day.

Further, for its renewables unit, it now expects between an adjusted loss of $300 million and an adjusted profit of $300 million for the fourth quarter of 2023, compared to an adjusted profit of $293 million in the fourth quarter of 2022.

Shell will release its 2023 results on February 1.

Shell shares fell 2.3% to 2,511.44 pence each on Monday morning in London.

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