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Reuters: Shell profit jumps as refining shines

Thu Jul 26, 2007 8:03AM BST
By Tom Bergin

LONDON (Reuters) – Royal Dutch Shell (RDSa.L: Quote, Profile, Research) posted a 20 percent rise in second-quarter current cost of supply (CCS) profit to $7.556 billion (3.687 billion pounds) on Thursday, as fat refining margins helped outweigh lower production.

Shell said in a statement that the CCS result, which strips out changes in the value of inventories, included a non-operating gain of $660 million.

 Excluding this gain, the underlying result was up 5 percent at $6.896 billion, beating an average forecast of $6.770 billion from a Reuters poll of 10 analysts.

The world’s second-largest, non-government controlled oil company by market value said production of oil and gas fell 2 percent to 3.178 million barrels of oil equivalent per day (boepd), in line with analysts’ expectations.

High oil prices underpinned the results although realisations were in line with the levels achieved in the same period last year.

Refining division earnings jumped over 40 percent thanks to high margins and better fuel retail margins.

Shell’s result compares with a fall in second-quarter earnings at rivals BP (BP.L: Quote, Profile, Research) and Italy’s ENI SpA (ENI.MI: Quote, Profile, Research).

(Additional reporting by Randolph Fabi)

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