Shell has reported a drop in profits as lowering oil prices offset high production costs.
The global oil company has seen a net adjusted profit slide of 6 percent to $6.6 billion in the third quarter. Royal Dutch Shell’s CEO, Peter Voser, said that the industry environment is currently “difficult”, but “There is more to come from Shell,” according to The Financial Times.
Shale gas is one of the big players in lowering oil prices. The United States is currently boosting shale gas production — an alternative to crude oil — by using techniques including hydraulic fracturing.
This relatively new method is also known as “fracking”, the creation of fractures in rock through pressurized fluid. Although this does grant access to previously inaccessible resources, due to health and environmental concerns, some countries have suspended or banned the practice altogether.
It is not only the American market which has seen a reduction in oil price, as Europe and Canada have also been affected.
Shell blamed the impact of Hurricane Isaac and rising production costs for the profit drop in the third quarter. The firm also saw a marginal drop in oil and gas production, which is now 2.982 million barrels of oil a day, compared to 3.012 million last year. Gas sales rose 4 percent, equating to 4.76 million tonnes.
Fighting against the volatile energy market, Shell said it has spent $600 million on new acreage worldwide in Q3.