Lower oil production blamed for Royal Dutch Shell profits fall

Royal Dutch Shell yesterday blamed lower oil production, weaker refining margins and higher costs for a fall in third quarter profits.

The company said that earnings on a current cost of supply basis – which strips out changes in the value of fuel inventories – fell from $6.9bn to $6.4bn.
helped by higher earnings from insurance and income.

Chief executive, Jeroen van der Veer, described the results as “satisfactory” in the light of the weaker refining margins and said they were underpinned by the group’s operating performance.

“We continue to rejuvenate our portfolio with sustained investment in new legacy assets and through disposals. The execution of our strategy is on track.”

Chief financial officer, Peter Voser, said overall oil and gas output was down 4%, with oil production, usually the highest source of earnings for oil companies, down 9%.

Earlier this year Shell sold control of the Sakhalin 2 project in Siberia to Gazprom but hydrocarbon production is expected to benefit from Deimos in the Gulf of Mexico and Norway’s Ormen Lange gas field, where production is under way.

Guardian