New Shell new boss Ben van Beurden has admitted the oil major’s performance was “not what I expect” after issuing a shock profit warning – just two weeks after taking the helm.
A decline in oil and gas prices, and ongoing problems with refining operations, have led the Anglo Dutch major to cut its forecast for earnings to $2.9billion (£1.8bn) – a significant drop from the $4billion previously expected.
The decline is expected to leave full-year results 23% lower than expectations, at around $19.5billion (£11.9billion)
Shares in the firm fell 3% in the wake of the news.
“Our 2013 performance was not what I expect from Shell,” admitted van Beurden, who only succeeded Peter Voser as chief executive on January 1.
“Our focus will be on improving Shell’s financial results, achieving better capital efficiency and on continuing to strengthen our operational performance and project delivery.”
Higher exploration expenses, lower output and weak conditions in the downstream industry were blamed for the surprise shortfall.
The company confirmed the security situation in Nigeria remained a problem that had impacted on results, after previously warning last October that the company was losing around 65,000 barrels of oil a day to thieves.
The January 30 results are exected to reveal an impairment charge to the company’s upstream business of around $700million, with the Americas arm of the firm continuing to operate at a loss.
The weakening of the Australian dollar, where Shell is investing heavily in LNG projects – including the giant Prelude floating LNG facility – also impacted on results.
Recommended for you
