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UpstreamOnline .com: Shell crests oil’s wave

By Upstream staff

Surging oil prices have pushed Shell’s current cost of supply net profit for the second quarter of the year to $6.3 billion, a 36% rise year-on-year.

Current cost of net supply profits strips out changes in inventory value.

Excluding a non-operational charge of $232 million, the result was $6.546 billion, up from an underlying net profit of $5.171 billion booked in the same period in 2005.

The company’s production slipped year-on.year, averaging 3.25 million barrels of oil equivalent per day in the second quarter, compared with 3.52 million boepd in the same period last year.

Shell cut its 2006 output target, saying its production would be around 3.4 million boepd rather than the forecast 3.5 million boepd to 3.6 million boepd if shut ins in Nigeria continue.

However, Shell added the caveat that the new target assumed oil prices at $50 – well below current levels.

If prices are above $50, Shell will receive even less oil under its production contracts, meaning output could be under 3.4 million boepd.

Shell added itsw capital spending plans for 2006 and 2007 remain unchanged.

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