Newspaper article The Evening Standard (London, England)

Soaring Costs Send Shell Profits Diving

Newspaper article The Evening Standard (London, England)

Soaring Costs Send Shell Profits Diving

Article excerpt

Byline: ROBERT LEA

ROYAL DUTCH SHELL today joined its FTSE 100 arch-rival oil major BP in reporting a fall in profits in the third quarter of the year.

Shell admitted today that profits in its key exploration and production division plunged by 25% year-on-year, as group earnings in the three months to the end of September fell by 3% to $6.95 billion ([pounds sterling]3.7 billion).

Despite the record oil price of $78 a barrel being reached during the quarter and continuing historically high prices, Shell blamed its poor performance on rising costs, the hangover from the 2005 hurricane season in production in the Gulf of Mexico, and shutdowns in Nigeria where the company's operations have been hit by insurgents.

Profits were also hurt by high prices triggering production sharing costs, as well as a [pounds sterling]165 million back-tax demand from the British government.

Excluding the impacts of the Nigerian shutdowns and Gulf of Mexico problems, Shell said production rose by 3%. …

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