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(Corrects paragraph seven. Van Beurden is head of downstream,not head of upstream)
* Shell abandons its output target, keeps financial ones
* Move puts company in line with others in the sector
* Takes $2.2 bln charge for weak production of US liquids
* Profit miss is "disappointing", CEO Voser says
* Nigeria thefts, disruption could cost country $12 bln/yr
* Shares down 5 pct; Exxon also reports lower profits
By Andrew Callus
LONDON, Aug 1 (Reuters) - Rising costs, oil theft in Nigeriaand weak U.S. shale liquids production have hurt profits atRoyal Dutch Shell, adding both to upward pressure onspending and to uncertainty on output growth.
These pressures prompted outgoing chief executive PeterVoser to abandon the company's target to deliver 4 millionbarrels a day of production by 2017. They also resulted in a$2.2 billion charge against the group's U.S. shale business.
Voser's abandonment of output targets brings Shell into linewith other oil companies, and shows how the industry isstruggling to translate investment into oil.
Voser called the company's second quarter result, publishedon Thursday, "disappointing." But he said a financial target toachieve $175-200 billion of cash flow from operations for theperiod 2012 to 2015 was intact.
The company's stock fell 5.0 percent - a big drop by thestandards of normal trading day in Europe's biggest oil company- as analysts geared up to cut annual profit forecasts. Theshares ended the day at 21.33 pounds, down 4.7 percent.
Shell said it took a $700 million hit for Nigeria thefts andother issues in the country - which it said cost Nigeria itself$12 billion a year - and for the tax impact of a weakeningAustralian dollar. Shell has put more of its Niger Deltaactivities up for sale.
"Higher costs, exploration charges, adverse currencyexchange rate effects and challenges in Nigeria have hit ourbottom line," said Voser, who is due to retire and be replacedby downstream chief Ben van Beurden at the end of this year."These results were undermined by a number of factors - but theywere clearly disappointing for Shell."
Adjusted second quarter net earnings on a current cost ofsupply (CCS) basis came in at $4.6 billion, down from $5.7billion a year ago and below analysts' expectations of aroundlast year's figures.
"There are mitigating factors, but we would expect ourforecasts to fall by about 5 percent," Investec analyst NeilMorton said in a research note.
REVIEW FOR U.S. SHALE LIQUIDS
Including adjustments, Shell's CCS result was lower still at$2.4 billion, mainly due to the $2.2 billion charge forliquids-rich shale properties in North America. Shell said thisreflected exploration and appraisal drilling results andproduction information that was not as positive as previouslyhoped.
These assets are also under a review now which will lead todivestments and a refocusing of investment into fewer plays,with growth potential, Shell said in its statement.
Shell vies with U.S.-based Chevron for the world No.2 spot among listed oil companies behind Exxon Mobil.Exxon also reported lower profits on Thursday.
Shell's results came in the same week as disappointingresults from rival BP and on the same day as smallerItalian group was forced to cut its output target -partly because of Nigerian troubles.
NIGERIA
In Nigeria, Shell's share of onshore production has fallento 158,000 barrels a day in the second quarter from 260,000 in2012. Overall, Nigeria's production has dropped by 500,000barrels a day over the past few years to around 2 million.
Shell has been selling Nigerian onshore assets where most ofthe problems lie and said in June it would sell more Niger Deltaassets. On Thursday it said it would be getting rid of about80,000 to 100,000 barrels of production in this way. Oilindustry sources pointed this week to four blocks that are forsale.
Shell's net capital spending will be higher in 2013 at $40billion up from the $34 billion flagged early in the year,finance director Simon Henry said, as a result of some finalinvestment decisions that have been taken since.
This is also because the company's deal to acquire LiquefiedNatural Gas (LNG) assets from Repsol may close earlierthan anticipated in the second half of this year. Shell's$120-130 billion net capital spending target for 2012 to 2015 isunchanged.
(Additional reporting by Simon Falush and Tricia Wright;Editing by Louise Ireland and Jane Merriman)
