Shell has revealed profits substantially down on its previous year’s figures and said it will accelerate the sales of assets.
Stripping out the effects of oil price movements it said profits for the final quarter of 2013 were $2.9bn (£1.7bn) compared with $5.6bn for the same period in 2012. Profits for the full year were $19.5bn, down from $25.3bn the previous year.
The newly appointed Shell CEO Ben van Beurden said that while the company’s overall strategy was sound, a number of factors had affected its operations last year. He said these included the worsening security situation in Nigeria and court rulings in the US which had “raised substantial obstacles to Shell’s plans for drilling in offshore Alaska”.
Because of the lack of a clear path, he said he was not willing to commit further resources for drilling in Alaska in 2014 and Shell would therefore stop its exploration programme for this year.
He said the company would increase the pace of asset sales, which were expected to be $15bn for 2014-15 combined in upstream and downstream. “We are making hard choices in our world-wide portfolio to improve Shell’s capital efficiency,” van Beurden said.
With a changing operational landscape and the streamlining of Shell’s portfolio, the company will no longer be updating against previous cash flow and net spending targets. “I want Shell to be measured on our competitive performance,” he explained.