Shell Nigeria has witnessed a fall in earnings as there continues to be an increase in costs as well as oil thefts in Nigeria. Shell posted second quarter earnings of $2.4billion, down from the $6billion posted 12 months previously which included a net impairments of $2.2billion. Adjusted second quarter net earnings, on a current cost of supply (CCS) basis, were $4.6billion, also down on last year by more than $1billion.
The outgoing chief executive, Peter Voser, noted that "higher costs, exploration charges adverse currency exchange rates and challenges in Nigeria have hit the bottom line"
"These results were undermined by a number of factors - but they were clearly disappointing for Shell", he further noted.
Production in the second quarter dropped 1% as the situation in Nigeria continues to deteriorate, costing around 100,000 bpd. The company said ongoing thefts from Nigerian supplies had cost it around $700million this quarter, with the Nigerian government facing a $12billion bill this year in lost revenue.
Oil theft in Nigeria's Niger Delta region continues to be a major albatross to the Country's oil industry, with an estimated 7% of the Country's oil being stolen everyday.
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