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BP and Shell to declare profits of £68bn

Oil giants to declare profits of £68bn

Richard Wachman
The Observer, Sunday April 27 2008

BP and Shell will together make record profits of more than $68bn this year if the oil price stays at current levels, according to City forecasters.

Brent crude soared to $116 a barrel on Friday as BP shut down a key North Sea pipeline ahead of industrial action and a strike at Exxon in Nigeria disrupted production. Oil companies are profiting at a time when motoring and consumer organisations are complaining about the price of petrol, which has hit £5 a gallon. BP and Shell will this week report record profits for the first quarter thanks to an oil price that has stood at an average of $110 a barrel since the start of the year.

Richard Griffiths at broker Evolution Securities says BP can expect to see extra operating profit of $400m for every one-dollar rise in the price of crude. If the futures market is correct, he says, and the oil price remains high, a ‘back-of-the-envelope calculation’ would see BP record an annual after-tax profit of $32bn, while Shell would notch up $36bn.

Oil and gas prices have been driven higher by a two-day strike due to start today at Scotland’s Grangemouth refinery. The strike has stoked fears of fuel shortages in Scotland and the north of England, and there are reports of panic buying by Scottish motorists.

Trade union Unite said yesterday that its members had received a letter from Grangemouth’s owner, Ineos, saying that the company’s final salary pension scheme would be closed to new members from August. Talks at conciliation service Acas broke down last week. Union officials accused Ineos of being ‘incendiary’ rather than conciliatory; company officials warned of the effects of a strike on the UK economy.

A strike at Exxon in Nigeria had halted output of 200,000 barrels a day. Rebels in Nigeria claimed responsibility for another attack on a Shell pipeline. and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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