Shell capped a record first quarter for the oil majors by announcing a doubling of earnings Friday as war in Iraq, turmoil in Nigeria and strikes in Venezuela provoked a surge in prices.
The three biggest oil groups -- ExxonMobil, Shell and BP -- earned almost US$16 billion in the first three months of this year when political unrest, military action and a cold winter in North America pushed prices to the ceiling.
Shell's net income was up 136% at US$5.3 billion, boosted by the US$1.3 billion sale of its stake in German gas company Ruhrgas, while its adjusted earnings -- its preferred measure -- rose 96% to US$3.9 billion.
Phil Watts, chairman, sounded a cautionary note by conceding that this happened in an "exceptional" quarter. He warned that the high margins were likely to be unsustainable in the months ahead.
Shell's record earnings came a day after Exxon, the world's largest oil group, reported the biggest quarterly corporate profits in history at US$7 billion and three days after BP announced its own record of US$3.7 billion.
Shell took some gloss from its figures by saying return on capital employed, the industry's benchmark, was 18.3%, against 20% at BP and 30% at Exxon.
The Anglo-Dutch group's earnings were propelled by a rise in profits at its exploration and production unit from US$1.45 billion a year ago to US$2.8 billion, on the back of higher prices.
Output of oil and gas rose to its highest levels in 10 years, up 6% to 4.2 million barrels a day, partly due to the contribution of Enterprise Oil, bought a year ago. Shell expects average output this year to be 4.1 million barrels a day.
The group said prices for the second quarter would depend on the level of OPEC oil available, the impact of the cartel's recent decision to cut output, lower seasonal demand and, not least, the return of Iraqi exports to the market.
OPEC is reducing production by 2 million barrels a day from June 1 and is holding out the prospect of further cuts to prevent over-supply and a collapse in prices.
Shell said oil refining margins were considerably higher than a year ago, with demand bolstered by the cold winter, high US natural gas prices and the extended shutdown of Japan's nuclear power plants.
"Margin outlook for the remainder of 2003 is uncertain and much will depend on the pace of global economic recovery and Opec output policy in response to the expected return of Iraqi crude exports to the market," it said.
Watts added: "In uncertain economic times, the diversity of our businesses and our geographic spread are strengths."
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
For weeks now, the global tech industry has been waiting for a major artificial intelligence (AI) launch from DeepSeek (深度求索), seen as a benchmark for China’s progress in the fast-moving field. More than a year has passed since the start-up put Chinese AI on the map in early last year with a low-cost chatbot that performed at a similar level to US rivals. However, despite reports and rumors about its imminent release, DeepSeek’s next-generation “V4” model is nowhere in sight. Speculation is also swirling over the geopolitical implications of which computer chips were chosen to train and power the new
Elon Musk’s lieutenants have reached out to chip industry suppliers, including Applied Materials Inc, Tokyo Electron Ltd and Lam Research Corp, for his envisioned Terafab, early steps in an audacious and likely arduous attempt to break into the production of cutting-edge chips. Staff working for the joint venture between Tesla Inc and Space Exploration Technologies Corp (SpaceX) have sought price quotes and delivery times for an array of chipmaking gear, people familiar with the matter said. In past weeks, they’ve contacted makers of photomasks, substrates, etchers, depositors, cleaning devices, testers and other tools, according to the people, who asked not to
Japan approved ￥631.5 billion (US$3.97 billion) in additional subsidies to hasten Rapidus Corp’s entry into the high-stakes artificial intelligence (AI) chipmaking arena, ramping up support for a project widely regarded as a long shot. The capital is intended to bankroll Rapidus’ work for information technology firm Fujitsu Ltd, one of the initial customers that Tokyo hopes would get the signature endeavor off the ground. The new money raises the fees and investments that the government is injecting into the start-up to ￥2.6 trillion by the end of the current fiscal year to March next year, the Japanese Ministry of Economy, Trade and
RSS