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Anger over BP and Royal Dutch Shell profits

Times Online
The Sunday Times
October 26, 2008

Danny Fortson

OIL giants BP and Royal Dutch Shell will court fresh controversy this week when they unveil a combined £8.8 billion ($14 billion) in profits for the three months to September.

The pair will reveal the gains – equivalent to about $77m a day for both companies – just days after Gordon Brown threatened to call in the Office of Fair Trading to investigate fuel pricing if companies did not pass on the recent drop in the oil price to consumers.

This has more than halved since reaching a high of $147 a barrel in July. It closed on Friday at $64.15 a barrel.

The prime minister said last week: “I’m determined that the oil price comes down so that fuel bills can get to a far better position and petrol prices at the pump come down as well.

“I believe we can push further over the next few days to make that happen.”

He also said he was “disappointed” by the decision from Opec to slash production.

According to a Dresdner Kleinwort forecast, BP will reveal a $7.03 billion profit for the quarter when it reports on Tuesday, a 74% increase on the same period last year.

Two days later, Royal Dutch Shell is expected to reveal a $6.98 billion profit, up 9% from last year but a drop on the previous quarter as continuing problems hit production.

However, both companies are likely to be overshadowed by the American giant Exxon Mobil when it reports its quarterly performance on Thursday. This summer the company posted its largest-ever quarterly profit of $11.7 billion. The latest performance is expected to be slightly down on that figure.

The bonanza is likely to be a high-water mark for the industry as recession looms. The oil price is now less than half the record high it reached earlier this year. Worries that demand will soften have driven it down.

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