Shell profits double to $7 bn on high oil prices

27th October 2011, Comments 0 comments

Energy giant Royal Dutch Shell said Thursday that third-quarter net profits more than doubled to almost $7.0 billion, boosted by solid gas demand, high oil prices and strong refining margins.

Earnings after tax rocketed to $6.98 billion (4.98 billion euros) in the three months to September, compared with $3.46 billion a year earlier, the Anglo-Dutch group said in a statement.

Total revenues advanced 36 percent to $123.4 billion.

"Our third quarter results were higher than year-ago levels, driven by higher oil prices and Shell's performance," Chief Executive Peter Voser said in the earnings release.

"Our profits pay for Shell's substantial investments in new energy projects, to ensure low-cost, reliable energy supplies for our customers and to create value for our shareholders," he added

Excluding changes to the value of its energy inventories, Shell said profit soared to $7.0 billion in the third quarter, beating analyst estimates for $6.60 billion, according to a poll by Dow Jones Newswires.

In reaction, Shell's 'A' shares rallied 1.20 percent to close at 2,280 pence on the FTSE 100, which finished 2.89 percent higher.

"Robust demand for gas, higher oil prices and stronger refining margins helped drive Shell's quarterly profit to $7.0 billion, more than double the level it was a year ago," said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers.

Shell's oil and gas production meanwhile fell 2.0 percent to 3.0 million barrels of oil equivalent per day, after the company sold non-core assets on the way to raising up to $8.0 billion by the end of 2011.

Net profit jumped 83 percent to $24.42 billion in the first nine months of 2011, compared with the year-earlier period.

That compared with its British rival BP, which on Tuesday posted net profits of $17.7 billion in the nine months, also on the back of higher oil prices.

BP surged back into profit, declaring that it had now reached a "clear turning point" after the devastating Gulf of Mexico oil disaster in April 2010.

"Royal Dutch Shell followed fast on the back of the positive heels of BP ... by reporting that profits had doubled on the higher crude oil price and better margins," noted City Index analyst Joshua Raymond.

"The oil giant saw net income increase to ... double that of last time around but mostly in line with analyst expectations ... Shell shares rose over one percent on the day, tracking similar gains in the sector."

© 2011 AFP

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