Shell profits hit by high costs, Nigeria troubles

Shell CEO, Peter Voser*Nigeria could lose $12 per year

01 August 2013 – Shell said higher costs and gas supply disruptions in Nigeria were major factors that made for a “clearly disappointing” second quarter.
The Anglo-Dutch supermajor reported net earnings taking a dive in the quarter, dropping 20% to $4.6 billion (on a current cost of supply basis).

Shell chief executive Peter Voser said exploration charges and adverse currency exchange rate effects also hit the company’s bottom line.

“These results were undermined by a number of factors – but they were clearly disappointing for Shell,” he said in a statement on Thursday.

Shell reported an after-tax negative impact of $450 million related to the impact of the weakening Australian dollar on a deferred tax liability and at least a $250 million impact from the deteriorating operating environment in Nigeria.

Voser said the oil theft and disruptions to gas supplies in the country could cost the Nigerian government $12 billion in lost revenues per year.

“We will play our part, but these are problems Shell cannot solve alone,” he said.
*Danica Newnham, Upstreamonline

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