Higher costs and ongoing security problems in Nigeria saw Shell’s third quarter earnings drop 31% compared to last year.
The Anglo-Dutch energy giant posted earnings of $4.2billion for the last three months, down almost a third on the $6.2billion posted this time last year.
But their figures, on a cost of supply basis, were up on the $2.4billion made in the second quarter of the year.
Increased exploration and operating expenses were blamed for the fall, along with weaker industry refining conditions.
But the ongoing security problems in Nigeria also took their toll, with the company revealing it lost around 65,000 barrels of oil per day to oil thieves and a blockade of liquefied natural gas from the country.
“We are facing headwinds from weak industry refining margins, and the security situation in Nigeria, which continue to erode the near term outlook,” said outgoing Shell chief executive Peter Voser.
The company is now looking towards its investment programme for the next year, with a $1.4billion payout due within the next three months for its successful bid in the Libra pre-salt discovery off Brazil.
“Shell has a strong project flow in place for 2014 and beyond,” said Voser.
“We have started up a series of new oil and gas fields in the last few months, in deep water, integrated gas, and in our longer-term plays such as Iraq. These new fields are part of a project flow that will drive Shell’s cash flow in 2014 and beyond, coming alongside a reduction in net spending next year as we work through a series of acquisitions, and increase the pace of asset sales.
“The company is rich with new investment opportunities – in the next few quarters Shell’s capital discipline means we will need to make hard choices between the best new investment opportunities from this industry-leading portfolio.”
See analysis of the Nigerian crisis and whether it remains a viable option for the oil and gas industry in tomorrow’s Press and Journal
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