Shell shows 6% dip in third quarter

Shell’s third quarter results, released Thursday, showed a negative effect from the cheap production of shale gas deposits in the US.

One of Europe’s largest energy groups reported a 6% fall in net adjusted profits, to $6.6 billion (€5.09bn). This was still ahead of analysts’ predictions of $6.3 bn.

The dividend for the quarter is 43c (33 euro cent), up one cent. Write-downs included $354 million for older, more expensive shale gas assets in the US. This followed the fall in gas prices there due to the abundance of shale gas.

Oil and gas production declined by 1% to 2.98m barrels of oil equivalent per day (bpd). The company reported gas production increased by 4%, with liquids production down 5%.

CEO Peter Voser said, in a company statement: “Our earnings were driven by lower oil and gas prices, and lower chemicals margins, which offset the benefits of our operating performance, underlying growth in oil and gas production, and higher results in Integrated Gas and Oil Products.” He said that energy markets remained “volatile” and there was a “difficult industry environment".

Reuters quotes industry analyst Dominique Patry, who said there had been fears that Shell would have to take a big writedown, given the company’s position onshore gas in the US, and the similar writedown by competitors in the second quarter.