Note 20 - Debt

Shell has access to international debt capital markets via two commercial paper (CP) programmes, a Euro medium-term note (EMTN) programme and a US universal shelf (US shelf) registration. Issuances under the CP programmes are supported by a committed credit facility and cash.

Under the CP programmes, Shell can issue debt of up to $10,000 million with maximum maturities ranging between 183 days and 364 days depending on the form of the notes issued; and $10,000 million with maturities not exceeding 397 days.

The EMTN programme is updated each year, most recently in September 2022. During 2022, no debt was issued under this programme (2021: no debt issued).

The US shelf registration provides Shell with the flexibility to issue debt securities, ordinary shares, preferred shares and warrants. The registration is updated every three years and was last updated in March 2021. During 2022, no debt was issued under the US shelf registration (2021: $1,500 million).

On December 13, 2019, Shell refinanced its revolving credit facilities (RCF), which are linked to the Secured Overnight Financing Rate (SOFR), at pre-agreed margins. In December 2022, Shell renewed the short-dated tranche of the facility of $1,920 million to expire in 2023 (2021: expiring in 2022) with two further one year bank extension options, that would take final maturity to 2025. The additional RCF tranches are: $320 million expiring in 2025 (2021: expiring in 2025) and $7,680 million expiring in 2026 (2021: expiring in 2026), a total RCF of $9,920 million. The terms and availability are not conditional on Shell’s financial ratios nor its financial credit ratings. The interest and fees paid on these facilities are linked to Shell’s progress towards reaching its short-term Net Carbon Footprint intensity target.

The following tables compare contractual cash flows for debt excluding lease liabilities at December 31 with the carrying amount in the Consolidated Balance Sheet. Contractual amounts reflect the effects of changes in foreign exchange rates; differences from carrying amounts reflect the effects of discounting, premiums and, where fair value hedge accounting is applied, fair value adjustments. Interest is estimated assuming interest rates applicable to variable-rate debt remain constant and there is no change in aggregate principal amounts of debt other than repayment at scheduled maturity, as reflected in the table.

Interest rate swaps have been entered into against certain fixed rate debt affecting the effective interest rate on these balances (see Note 25). The fair value of debt excluding lease liabilities at December 31, 2022, was $51,959 million (2021: $67,066 million), mainly determined from the prices quoted for those securities.