Cancelled projects wrecked Shell’s earnings
The company reported a huge pre-tax loss of $9.1 billion (£6 billion) after booking billions in writedowns on cancelled projects such as the Carmon Creek development in the Canadian oil sands and an oil drilling project in the Arctic.
“These charges reflect both a lower oil and gas price outlook and the firm steps we are taking to review and reduce Shell’s longer-term option set,”Royal Dutch Shell Chief Executive Officer Ben van Beurden said “These are difficult, but impactful decisions. I am determined that Shell will become a more focused and competitive company as a result.”
These “exceptional items” reported this quarter cost the company a huge $7.9 billion, but Shell is still keeping its dividend pay out to shareholders.
Earnings excluding the charges were $1.8 billion, a decrease on the $5.8 billion reported for the third quarter of 2014.
The industry has been hit hard by the tumbling oil price, which has stayed mostly below $50 a barrel this quarter, falling from $100 last year.
Shell’s rival, BP, on Wednesday said it would slash costs as it prepares for an era of cheap oil lasting years.