Last Thursday, oil and gas mega-corporation Royal Dutch Shell posted its ‘clean’ profits for the last quarter of 2013, totaling $2.9 billion, according to a report from the BBC. These numbers reflect the profits that account for oil price movements, and come two weeks after the company released its first price warning in ten years, according to the Financial Times.
In addition, full year earnings fell from $25.3 billion to $19.5 billion.
This past quarter was a significant blow for the company, as figures from the same period one year ago were $5.6 billion. According to the Financial Times, Shell’s leading officials speculate that these low numbers are related to political instability in Nigeria, high exploration costs and industry-wide tensions.
Royal Dutch Shell’s new CEO, Ben van Beurden, was quoted in the BBC as saying that he was looking to make changes to the company’s strategy, seeking to improve returns and cash-flow performance instead of focusing on new projects.
One of those projects was an exploratory program in Alaska, set to begin in the summer of 2014. This decision by van Beurden comes on the heels of a US court of appeals ruling that determined that the US government had not carried out the proper environmental risk assessment necessary to allow exploration to occur in that area.
According to the BBC, Shell had already spent an estimated $4.5 billion in exploring offshore drilling in Alaska since 2005, but the project has encountered environmental opposition from the beginning.
Instead, van Beurden is looking to scale back capital spending to $37 billion instead of $46 billion.
Royal Dutch Shell is currently the third-largest publicly-traded oil and gas company. It is incorporated in the United Kingdom and has its headquarters in the Netherlands. In terms of revenue, it is the largest company in the world.
