With news of a nearly 60% fall in second-quarter net profits blamed in large part on falling value of its once-promising shale oil fields, Royal Dutch Shell (RDS.A, RDS.B) is suddenly facing a host of challenges.
The Wall Street Journal reports that Shell recorded a $2 billion write-down of its North American shale assets, which not only highlights the challenges in finding cost-effective oil sources, but in Shell’s struggles of late. Rising production costs and oil theft in Nigeria have also recently plagued Europe’s largest oil company.
Shell Chief Executive Peter Voser told the Journal that while the assets were “disappointing,” other oil firms are also having issues trying to effectively reap the rewards of shale oil.
Shell earned $4.6 billion, 20% less than the year-ago period, on revenues that were down 4% to $112.67 billion.