Shell takes loss on low oil prices, failed Arctic exploration

Dutch petroleum company Shell on Thursday reported its net income for the third quarter is 70 percent lower compared to the same quarter of last year. The company has been hit hard with $8.2 billion in charges relating to failed exploration projects in Canada and the Alaskan Arctic, coupled with the current low price of Brent Crude. The company reported on Thursday that it incurred losses of $7.4 billion for the third quarter, after adjustments made for inventory and one-time items, from last years $4,5 billion profit, reported the New York Times. The company is starting to take large write-offs due to closing projects that no longer make economic sense in the current price environment. Oil and gas extraction earnings have fallen by 50 percent from a year earlier, according to Reuters. Late last month Shell ended the fruitless 9 year exploration of the Alaskan Arctic, at a cost to the company $2.6 billion. The Carmen Creek oil sands project in Canada also cost the oil company $2 billion. This project was suspended on Tuesday Currently oil prices are standing at $48 per barrel, Shell’s chief financial officer Simon Henry was reported saying the company’s break-even prices is $60 per barrel. British rivals BP and Italian company Eni have both reported third quarter losses due to the lower price of oil.