Business

Royal Dutch Shell profits slide

  • 31 October 2013
  • From the section Business

Royal Dutch Shell has seen its third-quarter earnings fall to $4.2bn (£2.6bn) from $6.2bn due to higher costs across much of its business.

The oil giant said operating, exploring and maintenance expenses had all risen.

It said it was seeing lower profit margins from its refinery business - which applies across the industry.

Shell also said its income was held back by continuing security problems in Nigeria where its business is often sabotaged.

On the plus side, Royal Dutch Shell said its liquids business had performed well in the Americas and it had seen higher production from its shale energy fields.

'Rich'

It also saw a rise in write offs on exploration wells that had not proved worth putting into production.

Royal Dutch Shell's chief executive, Peter Voser, said the company had plenty of plans for the future: "The company is rich with new investment opportunities.

"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."

Refining margins also hit Exxon profits

In Iraq, Shell has restarted production at its 45%-owned Majnoon venture, where it expects to increase production.

But the company warned that it was "facing headwinds from weak industry refining margins, and the security situation in Nigeria", which it said continued to erode the near term outlook.

The French oil company, Total, which also reported third quarter figures on Thursday, backed up Shell's assessment of the refinery business, saying that falling demand amid sluggish economic growth had slashed refining profit margins by 79%.

Total said that its profit was 2.8bn euros ($3.9bn) in the three months to September.

Also on Thursday, the US energy firm Exxon Mobil said that its profit for the third quarter was down 18%, as lower refining margins also dented its numbers.

The company chairman, Rex Tillerson, said that margins were "significantly weaker as a result of increased industry capacity".

However, the biggest oil and gas company in the US still made $7.8bn (£4.86bn) for the three months to the end of September. This was above analysts' forecasts.

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