Oil giant Royal Dutch Shell PLC said Thursday it has recorded a loss of $7.4 billion for the third quarter due to lower oil prices and huge expenditures that the company incurred for reorganizing and canceling major projects. In comparison, the Hague, Netherlands-based company reported $4.5 billion profit for the same period last year.

Shell also announced that it incurred a charge of $7.9 billion, including $2.6 billion in write-offs for Alaska exploration and a $2 billion write-down for halting its oil project in Carmon Creek in Alberta, Canada. The company's profit fell to $1.8 billion from $5.8 billion a year ago, a drop of 70 percent, without taking into account one-time items and the fluctuations in the value of the oil giant’s inventories. This showed the effect of the fall in oil prices.

“Shell’s integrated business and our performance drive are helping to mitigate the impact of low oil prices on the bottom line, in what is a difficult environment for the industry today,” the company’s CEO Ben van Beurden said in a statement released Thursday. “Costs are falling across the company and Shell’s performance drive is delivering at the bottom line,” added Beurden, who was appointed as Shell's CEO last year.

According to a report by the New York Times, Shell’s earnings from oil and gas extraction were also affected by a slump in this quarter’s petroleum prices, which were averaging at about half of what they were a year ago. Amid such an environment, the company has been re-analyzing its investment plans and has halted and canceled some projects that were risky.

The Carmon Creek project was expected to produce 80,000 barrels of oil a day through a process that would require huge amounts of capital investment, the Times reported. However, Beurden announced Tuesday that Shell stopped the construction for the project. Last month, the company also halted the nine-year fruitless exploration of oil in the Alaskan Arctic, in which it had invested $7 billion. The company also faced several strong protests from environmentalists for the Alaskan project, the Times reported.

During a conference call with journalists Thursday, the company said the oil well drilled this summer in Chukchi Sea was “a dry hole” and “a major disappointment,” the Times reported. 

For the quarter, Shell’s exploration and production unit lost $425 million, even without the write-offs, as compared with a profit of $4.3 billion a year ago.

“While our cash flow and our operating performance in the quarter were strong, the headline numbers we’re reporting today include substantial charges. These charges reflect both a lower oil and gas price outlook and the firm steps we are taking to review and reduce Shell’s longer-term option set,” Beurden said, in the statement, adding: “These are difficult, but impactful decisions.”