Shell's Earnings Fall 57 Percent on Charges, Higher Costs

Thursday, 01 Aug 2013 12:41 PM

 

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Royal Dutch Shell PLC reported a 57 percent fall in second quarter earnings due to impairment charges, lower production and higher costs.

Net profit was $1.74 billion, down from $4.08 billion in the same period a year ago, in part because of a $2.2 billion impairment charge on its shale oil assets in North America.

On the "clean current cost of supplies" measure preferred by most analysts — which strips out one-time charges and the impact of changes in oil price in the pipeline, earnings would have been 20 percent lower at $4.6 billion, Shell said Thursday.

"Higher costs, exploration charges, adverse currency exchange rate effects and challenges in Nigeria have hit our bottom line," Voser said. "These results were undermined by a number of factors — but they were clearly disappointing for Shell."

Production of oil and equivalents fell 1.3 percent to 3.06 million barrels per day. Voser, who is due to retire next year, apparently abandoned the company's longstanding goal of increasing production to 4 million barrels per day by 2018.

"We are not targeting oil and gas production volumes; rather we are focusing on financial performance," Voser said in a statement.

Voser is to be replaced by the company's chief of "downstream" operations, Ben van Beurden, who oversees the company's refining and chemicals marketing businesses.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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