Shell’s forecast-beating hike in profits
Jul 30 2010 by Peter McCusker, The Journal
ANGLO-DUTCH oil giant Royal Dutch Shell has put beleaguered rival BP in the shade with a 34% hike in second-quarter profits to US $4.2bn (£2.7bn).
The forecast-beating performance in an “uncertain“ economic climate came as Shell unveiled a 5% increase in production and faster than expected progress on its US $3.5bn dollar (£2.2bn) cost-saving plans, which will see 7,000 jobs go.
Earlier this week, BP revealed a £20.9bn hit from the Gulf of Mexico spill which sent it crashing into the red for the first time in 18 years.
Shell chief executive Peter Voser said the spill was a “tragedy for everyone affected“.
Shell’s results underline the sudden switch in momentum between the firm and its rival, triggered by the Gulf catastrophe.
Under chief executive Tony Hayward – who resigned this week – BP had closed the gap on Shell after years of under-performance, before the Deepwater Horizon crisis erupted in April. Shell lagged behind BP in its response to the economic downturn, but Mr Voser yesterday said the group is “on track for growth“ after adding to its gas interests in the US.
The firm also began production from its Gbaran-Ubie oil and gas project in Nigeria – which will produce 70,000 barrels of oil a day when fully operational – and signed a gas exploration agreement in Qatar during the quarter.
Shell also expects to sell up to US £8bn (£5.1bn) in assets this year as it refocuses its portfolio on projects with higher growth potential.
Profits were helped by higher refining margins than a year earlier, as well as higher oil and gas prices than in 2009, when much of the global economy was still in recession.
Upstream exploration and production profits were up 56% to US £3.2bn (£2bn), while refining earnings were in the black against a year earlier with profits of US $1.47bn dollars (£941m).
Mr Voser said the firm continued to see “mixed signals“ in the global economy but was “pleased“ with results.
