Royal Dutch Shell PLC, Europe’s largest oil company, yesterday reported a 22 percent jump in net profit for the third quarter, despite a fall in production, thanks to high oil prices and gains from the sale of operations.
The company earned US$8.45 billion, up from US$6.92 billion a year ago, as sales rose 45 percent to US$132 billion. The earnings included one-off gains of US$2.06 billion, mostly from the sale of operations, up from US$265 million in such gains a year earlier.
Shell’s oil production fell to 2.93 billion barrels of oil and equivalents per day from 3.14 billion a year earlier. The company’s average selling price was US$111.18 per barrel, up from US$70.81 a year ago.
Given the steep fall of oil prices in recent weeks, chief executive Jeroen van der Veer said the company was watching the global economic situation closely, but added Shell would be profitable amid a wide range of energy prices.
He said the third quarter results represented “satisfactory earnings and operating performance.”
“Our strategy remains to pay competitive and progressive dividends, and to make significant investments in the company for future profitability,” he said in a statement.
On Wednesday, Shell said that chief financial officer Peter Voser will be promoted to Van der Veer’s job after he retires in July of next year.
Shell’s exploration and production division increased profit 65 percent to US$5.50 billion, entirely due to oil price increases. Shell said a 10 percent fall in oil production was attributable in part to hurricanes in the Gulf of Mexico. Gas production was down 2 percent.
The company’s refining arm showed a loss of US$44 million, down from US$2.15 billion profit a year ago. On a “current cost of supplies” basis — a closely watched industry standard that strips out differences in the rise and fall of oil prices between drilling and refining, earnings were US$2.30 billion, up from US$1.65 billion.
Shell is the biggest European energy major in terms of stock market capitalization and the second biggest global player behind US titan ExxonMobil.
BP, the third largest, had revealed on Tuesday that its third-quarter net profit soared 83 percent to US$8.05 billion on the back of soaring oil prices.
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