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Times Online: Soaring oil price pushes Shell to new record

July 26, 2007

Anglo-Dutch oil giant reveals profits of $7.6 billion for the second quarter of the year, trumping rival BP by $1.5 billion

Steve Hawkes

Shell has turned the screw on rival BP by posting a record quarterly profit of £40 million a day on the back of sky-high crude oil prices and refining margins.

Results today showed the Anglo-Dutch giant made $7.56 billion (£3.7 billion) in the three months to June 30, up 20 per cent on last year and nearly $500 million ahead of its previous best.

Analysts had expected Shell to report quarterly profits of $6.7 billion.

BP posted second quarter profits of $6.09 billion on Tuesday and Tony Hayward, its new chief executive, admitted the group had not been performing well enough.

While BP’s US refineries have been hit by outtages and operational issues, Shell has been able to cash in on a surge in margins amid fears of a shortage of gasoline supplies.

World oil prices averaged nearly $69 a barrel in the second quarter – $10 a barrel more than a year ago – and petrol prices in the UK have nudged back towards £1 a litre.

Shell’s performance was flattered by $660 million of one-off gains, but stripping this out the result was still ahead of City expectations.

Mr van der Veer said: “We have delivered another set of competitive results, driven by operating performance.

“I am pleased with our progress in downstream and on exploration. We are rejuvenating our portfolio, with sustained investment in new legacy assets, as well as disposals, both upstream and downstream.

“We continue to see competitive growth opportunities based on our technological strengths, by making disciplined capital choices, in an industry of both higher energy prices and higher costs.”

Cash flow in the three month period was $8.8 billion, up $1 billion on a year ago despite a 2 per cent fall in oil and gas production to 3.18 million barrels a day as a series of attacks by rebels in Nigeria hit Shell’s operations in the country.

The second quarter performance means Shell made a first half profit of $14.5 billion, up 17 per cent on last year and another record.

The results come a day after leading US pension funds urged Shell and seven other international energy companies to cut their ties with Iran. Shell and Spain’s Repsol are working on a £5 billion project at the country’s giant South Pars natural gas field.

Shell refused to comment this morning except to reiterate that a final decision on whether to proceed with the investment was at least one year away.

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article2143167.ece
 

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