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.