Shell forecasts billions from its downstream arm

Oil major Shell yesterday announced it expects to generate $6-7 billion in annual organic free cash flow for its downstream business by 2020.

The forecast comes at the prediction of $60 per barrel oil, adding it expects the business to generate between $912bn per year by 2025.

Shell’s downstream business has proved crucial in recent years, providing most of its profits since the oil price downturn in 2014.

The business involves marketing, refining, trading, and chemicals.

Chief executive Ben van Beurden said: “Our unique downstream business is fundamental to delivering a worldclass investment case.

“Its unparalleled breadth, depth and the strength of our brand make our downstream business highly competitive, helping to generate strong free cash flows and returns, while making Shell more resilient over the coming decades.”

The company says downstream will help it thrive through the energy transition to low-carbon, and plans to invest between $7-9 bn a year across the business.