Shell profits soar on high oil prices

28th July 2011, Comments 0 comments

Royal Dutch Shell on Thursday said that net profits almost doubled to $8.6 billion (6.0 billion euros) in the second quarter as improved income from high oil prices offset a drop in production.

"Our second quarter 2011 earnings were higher than year-ago levels, driven by increased energy prices and Shell's operating performances," company chief executive Peter Voser said in a statement.

Profits in the second-quarter of 2010 were $4.5 billion.

Oil prices soared during the reporting period amid violent unrest in the crude-producing Middle East and North Africa region.

Shell added that production dropped in the quarter by 2.0 percent to 3.0 million barrels of oil equivalent per day.

Voser said that the outlook for the rest of the year was positive.

"We have made important progress with new production in 2011, and the ramp-up of our new projects should drive our financial performance in the coming quarters," he said.

Shell's update comes two days after rival BP said it had bounced back into profit in the second quarter thanks to high oil prices and after a huge loss last year caused by costs linked to the Gulf of Mexico oil spill disaster.

"Without the distractions which have plagued arch rival BP, Shell has been able to capitalise on higher energy prices and the bottom line performance is stark confirmation of the gap between the two," Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, said following Shell's results.

"Shell is also looking further ahead, with a major investment programme over the next three years already underway in countries such as Canada and Qatar."

He added that potential blind spots relating to the group's prospects tended to be industry wide "rather than Shell specific, such as many governments looking to increase their tax take on oil companies and the shadow cast over the sector from the Gulf of Mexico spill."

A leak triggered by an explosion on the BP-leased Deepwater Horizon rig in the US Gulf of Mexico on April 20, 2010 killed 11 workers, caused millions of barrels of oil to spew into the sea and left the BP with huge compensation costs.

© 2011 AFP

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