Shell's profits slide on Nigeria unrest, shares drop
(Nigeria) Royal Dutch Shell's net profit slumped 35 percent in the
third quarter on lower refining margins and disruption to production in
Nigeria, the Anglo-Dutch energy giant said on Thursday.
Profit after tax fell by a third to $4.677 billion (3.42
billion euros) in the three months to September 30 compared with the equivalent
period in 2012, the company said.
"We are facing headwinds from weak industry refining
margins, and the security situation in Nigeria, which continue to erode the
near term outlook," said Royal Dutch Shell chief executive Peter Voser,
who has already announced his intention to retire at the end of the year.
Theft of oil is a major problem in Nigeria, impacting
Shell's earnings in Africa's largest producer of crude.
Thieves are known to tap pipelines to syphon crude for sale
on the lucrative black market, while such illegal activity can lead to
explosions, fires and oil pollution.
Shell said that total oil and gas production, including
output in Nigeria, fell 2.0 percent compared with the third quarter of 2012.
The company added that profit on a current cost of supplies
basis -- which strips out changes to the value of its oil and gas inventories
-- dropped 31 percent to $4.25 billion in the reporting period.
Revenue climbed slightly to $116.5 billion in the third
quarter compared with one year earlier.
The market was left unimpressed by the earnings update,
sending shares in Royal Dutch Shell plunging 4.8 percent to 2,167 pence on
London's FTSE 100 index, which was down 0.37 percent at 6,752 points in
afternoon trade.
"The FTSE 100 is haunted by Royal Dutch Shell, as the
oil giant has a large weighting in the index," said David Madden, market
analyst at traders IG.
Shell had already been hit hard in the second quarter by a
shale asset write-down in North America, despite the region experiencing a boom
in both oil and gas production extracted from shale rock.
The company meanwhile revealed in May that Shell veteran
Voser would retire in 2014 to spend more time with his family.
Company insider Ben van Beurden will become group chief
executive on January 1.
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