Note 5 - Segment information

General information

Shell is an international energy company engaged in the principal aspects of the oil and gas industry and reports its business through segments: Integrated Gas, Upstream, Oil Products, Chemicals and Corporate, reflecting the way Shell reviews and assesses its performance.

The Integrated Gas segment manages liquefied natural gas (LNG) activities and the conversion of natural gas into gas-to-liquids (GTL) fuels and other products, as well as the New Energies portfolio. It includes natural gas and liquids exploration and extraction, and the operation of the upstream and midstream infrastructure necessary to deliver gas and liquids to market. It markets and trades natural gas, LNG, electricity and carbon-emission rights, and also markets and sells LNG as a fuel for heavy-duty vehicles and marine vessels.

The Upstream segment explores for and extracts crude oil, natural gas and natural gas liquids. It also markets and transports oil and gas, and operates the infrastructure necessary to deliver them to market.

The Oil Products segment comprises the Refining and Trading, and Marketing classes of business. The Refining and Trading class of business turns crude oil and other feedstocks into a range of oil products which are moved and marketed around the world for domestic, industrial and transport use. The Marketing class of business includes the Retail, Lubricants, Business-to-Business (B2B), Pipelines and Biofuels businesses.

The Chemicals segment operates manufacturing plants and its own marketing network.

The Corporate segment covers the non-operating activities supporting Shell, comprising Shell’s holdings and treasury organisation, its self-insurance activities and its headquarters and central functions.

This note is presented on the basis of segments effective until December 31, 2021, and therefore does not reflect the revised segments effective from January 1, 2022.

Basis of segmental reporting

Sales between segments are based on prices generally equivalent to commercially available prices. Third-party revenue and non-current assets information by geographical area are based on the country of operation of the Group subsidiaries that report this information. Separate disclosure is provided for the UK as this is the Company’s country of domicile.

Segment earnings are presented on a current cost of supplies basis (CCS earnings). On this basis, the purchase price of volumes sold during the period is based on the current cost of supplies during the same period after making allowance for the tax effect. CCS earnings therefore exclude the effect of changes in the oil price on inventory carrying amounts. CCS earnings attributable to Shell plc shareholders is the earnings measure used by the Chief Executive Officer for the purposes of making decisions about allocating resources and assessing performance.

Finance expense and income related to core financing activities, as well as related taxes, are included in the Corporate segment earnings rather than in the earnings of the business segments.

Information by segment on a current cost of supplies basis is as follows:

Download table (XLS, 13 kB)

2021

$ million

Integrated Gas

Upstream

Oil Products

Chemicals

Corporate

Total

Revenue:

Third-party

52,407

9,162

182,899

16,993

261,504 ^[A]

Inter-segment

7,883

36,325

11,835

6,362

—

62,405

Share of profit of joint ventures and associates (CCS basis)

1,906

632

765

609

3,913 ^[B]

Interest and other income, of which:

1,787

4,602

328

(14)

353

7,056

Interest income

—

431

511

Net gains on sale and revaluation of non-current assets and businesses

1,595

4,140

277

(17)

—

5,995

Other

188

425

(78)

550

Third-party and inter-segment purchases (CCS basis)

41,888

9,152

172,314

17,740

(5)

241,089

Production and manufacturing expenses

6,042

10,068

5,665

2,079

(32)

23,822

Selling, distribution and administrative expenses

926

197

8,499

1,150

556

11,328

Research and development expenses

158

339

212

106

—

815

Exploration expenses

127

1,296

—

1,423

Depreciation, depletion and amortisation charge, of which:

6,188

13,539

5,657

1,520

26,921

Impairment losses

768

920

1,995

382

—

4,065 ^[C]

Impairment reversals

—

(213)

(1)

—

(214) ^[D]

Interest expense

336

3,132

3,607

Taxation charge/(credit) (CCS basis)

2,246

6,100

751

(41)

(665)

8,391

CCS earnings

6,340

9,694

2,664

1,390

(2,606)

17,482

[A]	Includes $126 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount includes both the reversal of prior losses of $4,824 million related to sales contracts and prior gains of $4,892 million related to purchase contracts that were previously recognised and where physical settlement has taken place during 2021.
[B]	With effect from 2021, finance expense and income reported under Shell’s share of earnings of joint ventures and associates are included in the earnings of the business segments. Prior period comparatives have not been revised on grounds of materiality.
[C]	Impairment losses comprise Property, plant and equipment ($3,894 million) and Intangible assets ($171 million).
[D]	See Note 9.

Download table (XLS, 13 kB)

2020

$ million

Integrated Gas

Upstream

Oil Products

Chemicals

Corporate

Total

Revenue:

Third-party

33,287

6,767

128,717

11,721

180,543 ^[A]

Inter-segment

3,410

21,564

6,213

2,850

—

34,037

Share of profit/(loss) of joint ventures and associates (CCS basis)

562

(7)

988

567

(268)

1,842

Interest and other income, of which:

542

(93)

—

406

869

Interest income

—

589

679

Net gains on sale and revaluation of non-current assets and businesses

218

(9)

(2)

286

Other

(210)

431

(112)

(207)

(96)

Third-party and inter-segment purchases (CCS basis)

21,112

4,505

113,177

9,969

148,771

Production and manufacturing expenses

5,723

10,521

5,942

1,787

24,001

Selling, distribution and administrative expenses

729

(23)

7,360

1,339

476

9,881

Research and development expenses

103

486

209

109

—

907

Exploration expenses

611

1,136

—

1,747

Depreciation, depletion and amortisation charge, of which:

17,704

23,119

10,473

1,116

52,444

Impairment losses

12,221

8,697

6,531

27,463 ^[B]

Interest expense

374

3,580

4,089

Taxation (credit)/charge (CCS basis)

(2,507)

(467)

(898)

(983)

(4,848)

CCS earnings

(6,278)

(10,785)

(494)

808

(2,952)

(19,701)

[A]

Includes $10,008 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives. This amount includes both the reversal of prior gains of $1,136 million related to sales contracts and prior losses of $539 million related to purchase contracts that were previously recognised and where physical settlement had taken place during 2020.

[B]

Impairment losses comprise Property, plant and equipment ($26,676 million) and Intangible assets ($787 million).

Download table (XLS, 13 kB)

2019

$ million

Integrated Gas

Upstream

Oil Products

Chemicals

Corporate

Total

Revenue:

Third-party

41,322

9,482

280,460

13,568

344,877 ^[A]

Inter-segment

4,280

35,735

7,819

3,917

—

51,751

Share of profit/(loss) of joint ventures and associates (CCS basis)

1,791

379

1,179

546

(307)

3,588

Interest and other income, of which:

263

2,180

273

(7)

916

3,625

Interest income

—

899

Net gains on sale and revaluation of non-current assets and businesses

282

1,888

305

(8)

2,519

Other

(19)

292

(32)

(35)

207

Third-party and inter-segment purchases (CCS basis)

23,498

6,982

262,004

13,039

(6)

305,517

Production and manufacturing expenses

5,768

11,102

7,536

1,995

26,438

Selling, distribution and administrative expenses

716

7,976

1,323

449

10,493

Research and development expenses

181

450

219

112

—

962

Exploration expenses

281

2,073

—

2,354

Depreciation, depletion and amortisation charge, of which:

6,238

16,881

4,461

1,074

28,701

Impairment losses

579

2,576

622

—

3,782 ^[B]

Impairment reversals

—

(190)

—

(190) ^[C]

Interest expense

104

526

3,978

4,690

Taxation charge/(credit) (CCS basis)

2,242

5,878

1,319

(2)

(578)

8,859

CCS earnings

8,628

3,855

6,139

478

(3,273)

15,827

[A]	Includes $3,760 million of revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives.
[B]	Impairment losses comprise Property, plant and equipment ($3,639 million) and Intangible assets ($143 million).
[C]	See Note 9.

Download table (XLS, 12 kB)

Reconciliation of CCS earnings to income for the period
			$ million
	2021	2020	2019
Income/(loss) attributable to Shell plc shareholders	20,101	(21,680)	15,842
Income attributable to non-controlling interest	529	146	590
Income/(loss) for the period	20,630	(21,534)	16,432
Current cost of supplies adjustment:
Purchases	(3,772)	2,359	(784)
Taxation	808	(585)	194
Share of profit of joint ventures and associates	(184)	59	(15)
Current cost of supplies adjustment	(3,148)	1,833	(605)
Of which:
Attributable to Shell plc shareholders	(3,029)	1,759	(572)
Attributable to non-controlling interest	(119)	74	(33)
CCS earnings	17,482	(19,701)	15,827
Of which:
CCS earnings attributable to Shell plc shareholders	17,072	(19,921)	15,270
CCS earnings attributable to non-controlling interest	410	220	557

Information by geographical area is as follows:

Download table (XLS, 11 kB)

2021

$ million

Europe

Asia, Oceania, Africa

USA

Other Americas

Total

Third-party revenue, by origin

78,549 ^[A]

87,070

73,647

22,238

261,504

Intangible assets, property, plant and equipment, joint ventures and associates at December 31

38,881 ^[B]

97,278

58,286

48,595

243,040

[A]	Includes $21,846 million that originated from the UK.
[B]	Includes $21,974 million located in the UK.

Download table (XLS, 12 kB)

2020

$ million

Europe

Asia, Oceania, Africa

USA

Other Americas

Total

Third-party revenue, by origin

50,138 ^[A]

65,139

50,856

14,410

180,543

Intangible assets, property, plant and equipment, joint ventures and associates at December 31

38,785 ^[B]

103,191

62,976

49,909

254,861 ^[C]

[A]	Includes $12,958 million that originated from the UK.
[B]	Includes $23,302 million located in the UK.
[C]	As from 2021, assets classified as held for sale are presented separately. Prior period comparatives have been revised to conform with current year presentation. (See Note 30)

Download table (XLS, 12 kB)

2019

$ million

Europe

Asia, Oceania, Africa

USA

Other Americas

Total

Third-party revenue, by origin

98,455 ^[A]

139,916

83,212

23,294

344,877

Intangible assets, property, plant and equipment, joint ventures and associates at December 31

43,262 ^[B]

119,684

65,966

54,347

283,259 ^[C]

[A]	Includes $41,094 million that originated from the UK.
[B]	Includes $24,696 million located in the UK.
[C]	As from 2021, assets classified as held for sale are presented separately. Prior period comparatives have been revised to conform with current year presentation.

CCS earnings

earnings on a current cost of supplies basis

View complete glossary

GTL

gas-to-liquids

View complete glossary

LNG

liquefied natural gas

View complete glossary

Note 5 - Segment information

General information

Basis of segmental reporting

You might also be interested in

More in Consolidated Financial Statements

More in other sections