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BBC News: Higher production costs hit Shell

Shell’s results beat its European rival BP

Thursday, 25 October 2007, 06:50 GMT 07:50 UK 

Lower oil production and rising costs hurt Royal Dutch Shell’s business in its third quarter.

Shell’s earnings – measured by current cost of supply – fell 8% from a year earlier to $6.4bn (£3.1bn), down from $6.9bn.

Despite the loss, the results still beat analysts’ downbeat forecasts of $5.6bn, helped by the oil price setting a series of record highs recently.

Earlier this week, UK rival BP saw third-quarter profits slump 45%.

Shell said crude oil production in its third quarter period was down 9% compared to a year ago, partly as a result of the firm selling its majority stake in the Sakhalin-2 oil and gas project to Russia’s Gazprom earlier this year.

Higher production costs also ate into Shell’s earnings.

It said these were industry-wide problems, and given the weaker refining margins, Shell chief executive Jeroen van der Veer called the results “satisfactory”.

He added: “We continue to rejuvenate our portfolio with sustained investment in new legacy assets, and through disposals. The execution of our strategy is on track.” and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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