(Adds share price, analyst comment, details)
By Karolin Schaps and Ron Bousso
LONDON, Oct 29 (Reuters) - Royal Dutch Shell onThursday reported a hefty $8.2 billion charge, equivalent toaround 5 percent of its market value, due to write-offs onprojects in the Alaskan Arctic and Canada as Europe's biggestoil producer grapples with weak oil prices.
The oil major's third-quarter current cost of suppliesearnings, the company's definition of net income, came in at$1.8 billion, below analysts' expectations of $2.74 billion and70 percent lower than a year ago.
"In headline terms, this was a challenging quarter," saidShell Chief Financial Officer Simon Henry in a video statement.
However, Shell's bumper $70 billion deal to acquire smallergas-focused rival BG Group remained on track forcompletion early next year, it said, as it awaits regulatoryapprovals from China and Australia.
"The underlying performance does give us confidence tocapture the significant value that is available in the BGcombination and over time we will deliver that value back toshareholders," Henry said.
Shell's $8.2 billion charge included a $2.6 billionwrite-off due to its withdrawal from the Alaskan Arctic, as wellas an additional $2 billion charge made on the Carmon Creek oilsands project in Canada, which the company suspended on Tuesday.It also reflected other impairment charges of $3.7 billiontriggered by the downward revision of the long-term oil and gasprice outlook, Shell said.
Shell's London-listed A shares were down 2 percent at 0825GMT.
Shell's upstream oil and gas production division, swung to aloss for the first time in years. Its downstream refining andmarketing division, however, benefited from weak prices to runrefineries more profitably, with its net income up 46 percent at$2.6 billion.
"It's a rather messy set of results, but it's what Iexpected given some of the portfolio steps they have taken andit cleans up the balance sheet in advance of the BG merger,"said Jason Gammel, oil and gas equity analyst at Jefferies.
Italian rival ENI also announced a huge hit fromweak oil prices on Thursday, reporting a net loss in the latestquarter, while French group Total fared better thanexpected and raised its production forecast.
Unlike some of its rivals, Shell made no further change toits $30 billion capital expenditure forecast for this year,which it cut earlier in the year from $35 billion.
More information on Shell's strategy is expected at nextTuesday's management day briefing. (Additional reporting by Dmitry Zhdannikov; Editing by JaneMerriman and Greg Mahlich)
