Royal Dutch Shell profits eclipse crisis-hit BP

3rd February 2011, Comments 0 comments

Royal Dutch Shell almost doubled its net profit in 2010, the energy giant said Thursday, easily outperforming crisis-hit rival BP thanks to cost-cutting, higher oil prices and rising output.

Net profits, adjusted for the value of inventories of oil and gas, rocketed 90 percent to $18.6 billion (13.5 billion euros) last year, compared with $9.8 billion in 2009, the Anglo-Dutch group said in a results statement.

Ordinary net profit leapt 61 percent to $20.13 billion, while production grew five percent to 3.31 million barrels of oil equivalent per day.

However, Shell's share price closed down 3.27 percent to 2,177.5 pence on the London stock market as fourth-quarter earnings undershot expectations.

"The company has succumbed to a tinge of disappointment on the numbers and some profit taking," said analyst Richard Hunter at Hargreaves Lansdown Stockbrokers.

"Today's setback is likely to be short-lived, however, with the general market view being that the shares are a buy and currently preferred as a play to BP."

The fortunes of British group BP were last year ravaged by an oil spill disaster, widely acknowledged to be the worst environmental catastrophe in US history and which has knocked billions of dollars off the its value.

Shell's results were published two days after BP unveiled its first annual loss in almost two decades as a result of the Gulf of Mexico oil spill disaster. BP suffered a loss of $4.9 billion last year.

The Anglo-Dutch group though said it was boosted last year by cost-cutting and disposals, while it also invested $3 billion in exploration activities.

"Our 2010 earnings increased substantially from 2009 levels, driven by improving industry fundamentals, and Shell's production growth and cost performance," said Royal Dutch Shell chief executive Peter Voser.

However the company said it would not be drilling in Alaska this year because permits were being delayed in the wake of the BP spill.

"Despite our best efforts, critical permits continue to be delayed, and the timeline for getting these permits is still uncertain. Therefore, regrettably, because of these uncertainties, we have decided not to drill in offshore Alaska in 2011.

"We need urgent and timely action on permitting and regulations, in order to go ahead with a 2012 drilling programme, and we are working towards that," Shell added.

It also revealed Thursday that it had sold off $7 billion of non-core assets in 2010, bringing its total asset sales to about $30 billion over the last five years.

The group was also boosted last year by rising oil prices. New York crude averaged about $85 per barrel in the fourth quarter, compared with $76 last time around.

On Thursday, London Brent oil rocketed above $103 per barrel, hitting the highest level since late 2008 as traders fretted over the impact of the unrest in Egypt on global energy supplies.

© 2011 AFP

0 Comments To This Article