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UPDATE 1-Shell profits slump after weak oil forces Alaska, Canada write-offs

Published 2015-10-29, 03:47 a/m
© Reuters. UPDATE 1-Shell profits slump after weak oil forces Alaska, Canada write-offs
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(Updates throughout)
By Karolin Schaps and Ron Bousso
LONDON, Oct 29 (Reuters) - Royal Dutch Shell RDSa.L on
Thursday reported a sharp drop in third-quarter profits on the
back of low oil prices and a hefty $8.2 billion charge which
included write-offs in Alaska and Canada.
Shell's third-quarter current cost of supplies earnings, the
company's definition of net income, came in at $1.8 billion,
below analysts' expectations of $2.74 billion and 70 percent
lower than a year ago.
"These charges reflect both a lower oil and gas price
outlook and the firm steps we are taking to review and reduce
Shell's longer-term option set," Shell Chief Executive Ben van
Beurden said in a statement.
The $8.2 billion charge included a $2.6 billion write-off
for Shell's withdrawal from its exploration programme in the
Alaskan Arctic Sea in July, as well as an additional $2 billion
charge over the Carmon Creek oil sands project in Canada which
the company suspended on Tuesday.
Shell's oil and gas production division, known as upstream,
swung to a loss for the first time in years. Its downstream
division, however, benefited from weak prices to run refineries
more profitably, with its net income reaching $2.6 billion, up
46 percent year on year.
Italian rival ENI ENI.MI on Thursday also announced a huge
hit from weak oil prices as it swung to a net loss, while French
oil producer Total TOTF.PA fared better than expected and
raised its production forecast.
Shell said its bumper $70 billion takeover deal for smaller
gas-focused rival BG Group BG.L remained on track for
completion early next year as it awaits regulatory approvals
from China and Australia.

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