After posting a gain of around $4 billion in the second quarter of 2015, Royal Dutch Shell says it lost more than $7.4 billion in the third quarter. Lower oil prices played a role, as did the costs Shell incurred when it shut down large-scale projects.
Faced with crude oil prices that have now been slumping for more than a year, Shell and other oil big companies are restructuring their businesses and cutting costs.
NPR's Jeff Brady reports:
"A year ago, crude oil sold on the world market for $86 a barrel. Now it's almost half that. For drivers, that means lower gasoline prices. For oil companies, it means cuts. Shell's Chief Financial Officer Simon Henry says work has stopped on two big projects.
" 'We have halted exploration activities in offshore Alaska,' he says, 'and we've stopped the construction of the Carmon Creek in-situ heavy oil project in Canada.'
"Cutting Arctic drilling and the oil sands project in Alberta pleased environmentalists. The company believes that lower costs, and a proposed takeover of the gas company BG Group will prepare Shell to prosper as oil prices are expected to remain low for years to come."
Despite the loss, Shell announced a dividend of $0.47 per share.
In the third quarter of 2014, Shell had reported a profit of $4.46 billion. But Shell's earnings also fell year-to-year, from $5.8 billion in the third quarter of 2014 to $1.77 billion in 2015. The company blames about $1 billion of that fall on changes in currency exchange rates.