Shell pins poor profits on Nigeria troubles

Posted on 1 Aug 2013

Royal Dutch Shell's second quarter profits fell 20% to $4.6bn (£3bn) compared with the same period in 2012.

The FTSE-100 company cited security problems in Nigeria as the predominant reason for “clearly disappointing” results.

The oil firm highlighted the impact of $700m (£460m) of oil theft and gas supply disruptions in Nigeria as well as higher costs, exploration charges and exchange rates.

A weakening Australian dollar on a deferred tax liability lead to a $450m hit and higher operation expenses also contributed to the profits slump.

The latest results indicate the challenges ahead for incoming chief executive Ben van Beurden.

Current chief executive Peter Voser said the issues facing Shell were not problems the oil company could face alone.

Mr Voser added the company would now be focus on financial performance and had a more positive outlook for cash flow in 2015.

“We are not targeting oil and gas production volumes, rather we are focusing on financial performance.

“In the next 18 months we expect to see five major project start-ups, which should add over $4bn to our 2015 cash flow.”

Shares in Royal Dutch Shell went down 5.4% in early afternoon London trading to £21.18.