Oil Giant Shell Slumps To £4bn Quarterly Loss!

Oil giant Royal Dutch Shell has slumped to a loss of $6.1bn (£4bn) for the third quarter after taking a $8.2bn (£5.4bn) hit from ditching long term projects and the impact of lower oil and gas prices.

Shell said it had taken a $2.6bn (£1.7bn) hit on the recent decision to abandon drilling off Alaska as well as $2bn (£1.3bn) for another cancelled operation, in Canada.

Meanwhile, the company took a $3.7bn (£2.4bn) charge on the impact of a downward revision to the long-term outlook for oil and gas prices on its business - largely relating to its US shale gas investments.

Chief executive Ben van Beurden said that amid a tough time for the industry, the charges reflected "firm steps" being taken by the company to adapt.

He said: "These are difficult, but impactful decisions. I am determined that Shell will become a more focused and competitive company as a result."

Shell's underlying earnings, stripping out one-off costs, were also lower, falling by 70% compared to last year to $1.8bn (£1.2bn) and missing City expectations. London-traded shares in the Anglo-Dutch firm fell.

Finance director Simon Henry said: "In headline terms, this was a challenging quarter."

But Shell said its £47bn deal to buy gas-focused rival BG Group remained on track for completion early next year, as it awaits regulatory clearance from China and Australia.

Mr van Beurden said the deal would be "a springboard to focus Shell into fewer and more profitable themes".

Earnings from Shell's "upstream" oil and gas production division made an underlying loss thanks to the sharp decline in prices. The cost of a barrel of Brent crude oil has slumped from more than $100 in the middle of last year to less than $50.

However, its downstream refining and marketing division benefited from weak prices to run refineries more profitably.

Shell did not make any further cuts to its $30bn (£20bn) spending plans for the year, unlike rival BP which said it was paring back investment further after announcing third quarter profits had halved earlier this week.

Jason Gammel, oil and gas equity analyst at Jefferies, said: "It's a rather messy set of results, but it's what I expected given some of the portfolio steps they have taken and it cleans up the balance sheet in advance of the BG merger."

Elsewhere in the sector, Italian rival ENI slipped to a quarterly loss though France's Total fared better than expected and raised its production forecast.

#oilandgas #oil #chemical #softoilprices #countersoftoilprice #increaseproductivityviamobility #savejobs #reduceoverheads #Shelloil

Recent Posts
Search By Tags
No tags yet.