Note 21 - Leases
Shell has lease contracts in Integrated Gas and Upstream, principally for floating production storage and offloading units, subsea equipment, drilling and ancillary equipment, service vessels, LNG vessels and land and buildings; in Marketing, principally for land and retail sites, in Chemicals and Products, principally for plant pipeline and machinery, tankers and storage capacity; in Renewables and Energy Solutions, principally for power generation, storage capacity and land; and in Corporate, principally for land and buildings. Shell’s obligations under its leases are secured on the leased assets.
Right-of-use assets
Right-of-use assets are included in property, plant and equipment for the following amounts:
|
|
|
|
|
$ million |
||||
|---|---|---|---|---|---|---|---|---|---|
|
Exploration and production |
Manufacturing, supply and distribution |
|
|
|||||
|
Exploration and evaluation |
Production |
Other [B] |
Total |
|||||
Cost |
|
|
|
|
|
||||
At January 1 |
5 |
14,322 |
15,748 |
8,031 |
38,106 |
||||
Additions |
– |
1,088 |
2,305 |
2,111 |
5,504 |
||||
Sales, retirements and other movements [A] |
(5) |
(569) |
(1,530) |
319 |
(1,785) |
||||
Currency translation differences |
– |
(166) |
(60) |
(562) |
(788) |
||||
At December 31 |
– |
14,675 |
16,463 |
9,899 |
41,037 |
||||
Depreciation, depletion and amortisation, including impairments |
|
|
|
|
|
||||
At January 1 |
– |
7,935 |
5,946 |
2,273 |
16,154 |
||||
Charge for the year |
– |
1,182 |
2,223 |
797 |
4,202 |
||||
Sales, retirements and other movements [A] |
– |
(751) |
(1,444) |
23 |
(2,172) |
||||
Currency translation differences |
– |
(91) |
(30) |
(143) |
(264) |
||||
At December 31 |
– |
8,275 |
6,695 |
2,950 |
17,920 |
||||
Carrying amount at December 31 |
– |
6,400 |
9,768 |
6,949 |
23,117 |
||||
|
|||||||||
|
|
|
|
|
$ million |
||||
|---|---|---|---|---|---|---|---|---|---|
|
Exploration and production |
Manufacturing, supply and distribution |
|
|
|||||
|
Exploration and evaluation |
Production |
Other [A] |
Total |
|||||
Cost |
|
|
|
|
|
||||
At January 1 |
5 |
14,440 |
14,526 |
7,384 |
36,355 |
||||
Additions |
– |
311 |
2,149 |
1,420 |
3,880 |
||||
Sales, retirements and other movements |
– |
(365) |
(868) |
(259) |
(1,492) |
||||
Currency translation differences |
– |
(64) |
(59) |
(514) |
(637) |
||||
At December 31 |
5 |
14,322 |
15,748 |
8,031 |
38,106 |
||||
Depreciation, depletion and amortisation, including impairments |
|
|
|
|
|
||||
At January 1 |
– |
6,997 |
5,013 |
1,793 |
13,803 |
||||
Charge for the year |
– |
1,373 |
2,060 |
783 |
4,216 |
||||
Sales, retirements and other movements |
– |
(400) |
(1,093) |
(157) |
(1,650) |
||||
Currency translation differences |
– |
(35) |
(34) |
(146) |
(215) |
||||
At December 31 |
– |
7,935 |
5,946 |
2,273 |
16,154 |
||||
Carrying amount at December 31 |
5 |
6,387 |
9,802 |
5,758 |
21,952 |
||||
|
|||||||||
Lease arrangements
Lease liabilities are secured on the leased assets.
Shell also has certain lease contracts of items with lease terms of 12 months or less. For these lease contracts, Shell applies the ‘short-term lease’ recognition exemption. Lease expenses not included in the measurement of lease liability are:
|
|
$ million |
|---|---|---|
|
2022 |
2021 |
Expense relating to short-term leases |
552 |
644 |
Expense relating to variable lease payments |
1,251 |
1,172 |
The total cash outflow in respect of leases representing repayment of principal and payment of interest in 2022 was $6,280 million (2021: $6,777 million), recognised in the Consolidated Statement of Cash Flows within Cash flows from financing activities.
The future lease payments under lease contracts and the carrying amounts at December 31, by payment date are as follows:
|
|
|
$ million |
||
|---|---|---|---|---|---|
|
Contractual lease payments |
Interest |
Lease liabilities |
||
Less than 1 year |
5,914 |
1,533 |
4,381 |
||
Between 1 and 5 years |
15,624 |
4,655 |
10,969 |
||
5 years and later |
17,935 |
5,642 |
12,293 |
||
Total |
39,473 [A] |
11,830 |
27,643 |
||
|
|||||
|
|
|
$ million |
|---|---|---|---|
|
Contractual lease payments |
Interest |
Lease liabilities |
Less than 1 year |
5,805 |
1,667 |
4,138 |
Between 1 and 5 years |
15,889 |
4,972 |
10,917 |
5 years and later |
18,309 |
5,857 |
12,452 |
Total |
40,003 |
12,496 |
27,507 |