Royal Dutch Shell has warned of “significantly” lower profits.<br /><br />New boss Ben van Beurden – who is just two weeks into the job – detailed multiple problems and challenges as he said: “Our 2013 performance was not what I expect.” <br /><br />He announced a probable cut in fourth-quarter earnings to $2.9 billion dollars, from market expectations of about $4 billion.<br /><br />Analysts said Shell appeared to have suffered a perfect storm in the last three months – including weaker profit from refining oil, higher production costs and output stoppages in Nigeria. A weakening of the Australian dollar has not helped.<br /><br />The warning comes nearly 10 years to the day after Shell, the western world’s No. 3 oil company, revealed the so-called reserves accounting scandal, when the group dramatically downgraded its reserves estimates.<br /><br />It also follows a similar warning last week from Chevron, the second-largest US oil company. The warnings reflect how the industry is having to grapple with replacing reserves, lower oil prices and the need to control costs. <br /><br />“Shell’s profit warning is a confirmation of the impact of the downward trend in oil prices we’ve seen,” said Carsten Fritsch at Commerzbank. <br /><br />“In particular, the refined product markets in Europe have been very weak.”<br /><br />International oil prices have averaged about $110 a barrel for the past three years. Booming shale oil production in the nited States has helped lower prices there, however, and delivered a competitive advantage to many US refineries.<br /><br />The United States has also become a major exporter of gasoline and diesel, further hitting profit margins at refiners in Europe and Asia. <br /><br />While Shell has a number of refineries in North America, about two-thirds of its refining operations are in Europe and the Asia-Pacific.
