Shell says profits boosted by higher oil prices

28th April 2010, Comments 0 comments

British energy giant Royal Dutch Shell said Wednesday the group's first-quarter profits jumped on the back of higher energy prices, cost cutting and rising output.

Net profits, adjusted for the value of stocks of oil and gas, soared 49 percent to 4.9 billion dollars (3.7 billion euros) in the three months to March, compared with 3.3 billion dollars last time, Shell said in a statement.

That beat market expectations for adjusted net profit of 3.98 billion dollars, according to analysts polled by Dow Jones Newswires.

"Our results have improved considerably compared with year-ago levels, and our profitability has increased from the low levels we saw in the fourth quarter 2009," said Royal Dutch Shell Chief Executive Peter Voser.

"This has been driven by higher energy prices, operational and production performance and Shell's growth programmes."

Crude oil prices had stood at just over 41 dollars per barrel in the first three months of 2009 but rebounded to around 76 dollars per barrel in the same portion of this year.

At the same time, Shell has sought to slash costs to make it more competitive, axing 5,000 jobs last year, with another 1,000 positions due to go this year.

Revenue meanwhile surged 48 percent to 86.06 billion dollars in the reporting period, while ordinary net profit rallied 57 percent to 5.481 billion dollars.

Shell added that its production grew by six percent to 3.59 million barrels of oil equivalent per day. That was far higher than forecasts of a 0.2-percent increase.

"We are making good progress in improving our near-term performance, delivering a new wave of production growth," added Voser.

"Our results reflected the successful ramp-up of our new upstream projects in Russia and Brazil, supporting a six-percent increase in our production."

Shell's first-quarter figures were comfortably ahead of market forecasts, according to analyst Keith Bowman at Hargreaves Lansdown Stockbrokers.

The results come one day after rival BP declared that its first-quarter net profits rocketed 137 percent to 6.08 billion dollars on higher oil prices.

"Shell has replicated the feat of BP, generating results which have comfortably beaten forecasts," added Bowman.

"Aided by a rising oil price, restructuring measures have gained traction, costs are being cut, whilst production in Russia and Brazil is being ramped up.

"Furthermore, non-core refining assets are being sold, while a series of potential projects offer growth for the future."

© 2010 AFP

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