Shell serves profit slump warning, blames Nigeria

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Shell warned Friday that fourth-quarter profits were set to be “significantly lower than recent levels”, blaming higher exploration costs, lower volumes, the poor industry environment and disruption to Nigerian output.

Profit on a current cost of supplies basis — which strips out changes to the value of oil and gas inventories — was set to slump 70 percent to $2.2 billion (1.6 billion euros) in the three months to December, from $7.3 billion a year earlier.

“Shell’s fourth quarter 2013 earnings … were impacted by weak industry conditions in downstream oil products, higher exploration expenses and lower upstream volumes,” the London-listed company said.shell_logo

Over the course of 2013, CCS profit was expected to dive 38 percent to approximately $16.8 billion.

“Our 2013 performance was not what I expect from Shell,” said chief executive Ben van Beurden in the gloomy update, published just two weeks after he took over at the helm of the Anglo-Dutch energy major.

“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.”

Net profit was set to plunge 73 percent to $1.8 billion in the fourth quarter of 2013, compared with a year earlier.

Annual net profit was down 38.5 percent at $16.4 billion in 2013, from $26.7 billion in 2012.

Friday’s earnings update was published ahead of Shell’s official annual results statement, which is scheduled for publication on January 30.

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