Rising costs, oil theft in Nigeria and weak US shale liquids production have hurt profits at Royal Dutch Shell, adding both to upward pressure on spending and to uncertainty on output growth.
These pressures prompted outgoing chief executive Peter Voser to abandon the company's target to deliver 4 million barrels a day of production by 2017.
His action brings Shell into line with other oil companies, and shows how the industry is struggling to translate investment into oil.
Voser called the company's second quarter result, published today, "disappointing." But he said a financial target to achieve $175-200 billion of cash flow from operations for the period 2012 to 2015 was intact.
Shell said it took a $700m hit for Nigeria thefts and other issues in the country - which it said cost Nigeria itself $12 billion a year - and for the tax impact of a weakening Australian dollar. Shell has put more of its Niger Delta activities up for sale.
"Higher costs, exploration charges, adverse currency exchange rate effects and challenges in Nigeria have hit our bottom line," said Voser, who is due to step down at the end of this year.
"These results were undermined by a number of factors - but they were clearly disappointing for Shell,'' he added.
Adjusted second quarter net earnings on a current cost of supply (CCS) basis came in at $4.6 billion, down from $5.7 billion a year ago and below analysts' expectations of around last year's figures.
Including adjustments, Shell's CCS result was lower still at $2.4 billion, mainly due to a $2.2 billion charge for liquids-rich shale properties in North America.
Shell said this reflected the latest insights from exploration and appraisal drilling results and production information.
These assets are also under a review now which will lead to divestments and a refocusing of investment into fewer plays, with growth potential, Shell said in its statement.
Shell vies with US-based Chevron for the world number two spot among listed oil companies behind Exxon Mobil. Exxon also reported lower profits today.
Shell's results came in the same week as disappointing results from rival BP.
In Nigeria, Shell's share of onshore production has fallen to 158,000 barrels a day in the second quarter from 260,000 in 2012. Overall, Nigeria's production has dropped by 500,000 barrels a day over the past few years to around 2 million.
Shell has been selling Nigerian onshore assets where most of the problems lie and said in June it would sell more Niger Delta assets. It said today it would be getting rid of about 80,000 to 100,000 barrels of production in this way.
