THE HAGUE, Netherlands, July 28 (UPI) -- Lower crude oil prices continue to present problems for the industry and Shell is now focused on retooling efforts, the chief executive officer said.
"We are making significant and lasting changes to Shell's working practices and cost structure," CEO Ben van Buerden said in a statement.
Shell, moving through the year after a merger with British energy company BG Group, said net income during the second quarter fell more than 70 percent to $1.18 billion. The company attributed the decline in part to some of the fiscal pressures from its $7 billion tie-up with BG Group, weak industry conditions and tougher tax regimes.
On the exploration and production side, the company was supported by two new discoveries in Oman and the United States. A discovery in the U.S. waters of the Gulf of Mexico was characterized by Shell as "notable," with initial estimated recoverable reserves at 125 million barrels of oil equivalent.
The company said joining with BG Group would boost its gas potential. In early July, however, Shell said "global industry challenges" and tighter purse strings led it to delay a final investment decision for a gas export facility in Canada.
Shell said it was leaving oil and gas operations in as many as 10 countries, while focusing more heavily on gas-rich Australia and shale opportunities in the United States. Van Beurden in June said an energy market characterized by high volatility and low-carbon advances meant profound changes were necessary to survive.
In his latest statement, the executive said Shell was moving through the downturn by lowering costs, but delivering on some of its more predictable investments.
"Looking through the cycle, our investment plans and portfolio actions are focused firmly on reshaping Shell into a world-class investment case through stronger, sustained and growing free cash flow per share," he said.
AUSTIN, Texas, July 28 (UPI) -- Total crude oil production in Texas recorded nearly a 3 percent decline year-on-year for May, a state energy regulator reported.
The Railroad Commission of Texas, the state's energy regulator, said that overall crude oil production was lower than last year.
"Texas preliminary May 2016 crude oil production averaged 2,359,072 barrels daily, compared to the 2,429,347 barrels daily average of May 2015," the commission said.
Texas is the No. 1 oil producer in the country and witnessed financial pressures because of the downturn in crude oil prices. With the market showing some level of relative stability during the second quarter, the number of rigs in service in Texas is on the rise.
The Railroad Commission said May crude oil production came from 185,190 wells, but it provided no metric for comparison. The price for crude oil May 1 was $34.39 per barrel.
The Federal Reserve Bank of Dallas reported this week that the overall economy in the state had improved, though unemployment rates moved slightly higher in June. Its employment forecast for the year showed an expected 0.5 percent increase in employment, down from the previous forecast of 1.3 percent.
Despite a price recovery from May to June, the Dallas bank noted crude oil prices were still down in June by 18.5 percent year-on-year.
This week, Karr Ingham, an economist who created a metric gauging the health of the Texas energy sector, said state oil production is lagging behind trends in crude oil prices. In an emailed report, he cautioned that state energy sector recovery would be "frustratingly slow."