Shell reported a $2.4 billion (£1.6 billion) profit for the three months to the end of June, down from $6 billion the year before, as the group reeled from a $2.1 billion impairment charge, mostly relating to its US shale oil and gas operations, as well as costs relating to disruptions in Nigeria.
To make matters worse, the oil price traded about 5% below its level in the year-earlier period, while a weakening Australian dollar hit profits further.
Peter Voser, who unexpectedly announced in May that he would be retiring as chief executive next year, said: “Higher costs, exploration charges, adverse currency exchange rate effects and challenges in Nigeria have hit our bottom line.
“These results were undermined by a number of factors – but they were clearly disappointing for Shell.”
Shell said that the impairment charge “predominantly related to liquids-rich shales [that contain oil and/or gas] properties in North America, reflecting the latest insights from exploration and appraisal drilling results and production information”.
Voser said Shell would pick up the pace of asset sales, which have already seen the company divesting $21 billion worth of businesses in the past three years.
Shell is also conducting a strategic review in Nigeria, where “the deteriorating security situation onshore Nigeria and blockage of Nigeria LNG [the liquefied natural gas plant]” in the form of oil theft and sabotage knocked about $250 million off the group’s bottom line in the second quarter. The review could lead to Shell divesting up to 100,000 barrels a day of production in the eastern part of the Niger Delta.
Stripping out the impairment charge, Shell’s profits fell by 20% to $4.6 billion. Its shares fell by 111.50p to 2126.0p.
Source: Independent.co.uk
