Are Shell’s Write-Offs a Signal for UK Shale Industry?
The Netherlands-headquartered Royal Dutch Shell reported poor results in its half-year announcement, revealing a 24% year-over-year CCS earnings decline in relation to difficulties in its operation in Nigeria onshore and North America.
‘We have recently launched strategic portfolio reviews in both Nigeria onshore and North America resources plays, which will lead to further focus and disinvestments there, as we continue to shape the company for the future,’ reads a note released by the Anglo-Dutch company on Wednesday.
Despite not referring explicitly to shale operations, the company was pulled down also by weak US shale liquids production, alongside of rising costs and oil theft in Nigeria.
“These results were undermined by a number of factors – but they were clearly disappointing for Shell,” said Peter Voser, CEO of Shell.
These difficulties forced the company to abandon its target to deliver 4 million barrels a day of production by 2017. Taking into consideration an even starker drop registered by ExxonMobil, these criticalities are a clear signal to the industry. According to Reuters, the industry is struggling to translate investment into oil. Herald Scotland wrote that Royal Dutch Shell ‘emphasised its scepticism about the potential for shale gas in the UK after writing around $2 billion off the value of such unconventional assets in the US.’
Ben van Beurden will succeed Peter Voser as Chief Executive Officer of Royal Dutch Shell effective January 1st 2014.