In a further sign that things are not all well in the huge fossil fuel industry these days, the new CEO of Royal Dutch Shell, Ven van Beurden, has signalled that the big oil company’s fourth-quarter financial results will be a massive 48% lower than financial markets had expected, The New York Times has reported.
The company has blamed “weak industry conditions in refining, higher exploration expenses and lower production of oil and gas” for the big decline in financial performance. According to Bloomberg News, financial analysts had expected $4.9 billion in adjusted earnings for the quarter. Even though the poorer financial performance is unexpected, Shell has actually reported 3 straight quarters of lower than expected earnings.
Civiil unrest in Nigeria is said to be contributing to Shell’s production problems, as well as various issues with its controversial Alaskan drilling program, including accidents. In addition, demand for gasoline has been weakening in Europe, where “nearly all refineries” are losing money because they are not able to sell oil products above the growing costs of extraction and processing.
Do you think this period of poorer economic performance is an anomaly for the giant oil company? Or, is this going to be a growing trend in the fossil fuel industry, as extraction costs rise, and the world becomes increasingly carbon-constrained as it finally faces up to the realities of climate change? Time will tell.