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Fall In Oil Price Hits Profits At Shell

Adam Arnold, Sky News Online

Oil giant Royal Dutch Shell made profits of £1.8bn in the third quarter – down 73% on the same period last year.

Shell Oil Company

Profits fall sharply compared with same period in 2008

The company has been hit by falling oil and gas prices.

Shell’s share price fell around 3% in early trading following the results.

Chief executive Peter Voser said there were indications that energy demand and prices were “improving”.

But he also said the “outlook remains very uncertain” and the company was not expecting a “quick recovery”.

He went on to say his restructuring programme was yielding results with operating costs lowered by £608m in the first nine months of 2009 and around 5,000 jobs cut.

Sales at the company fell by 43% to £45.6bn.

Mr Voser said: “We see some indications that energy demand and pricing are improving.

“But the outlook remains very uncertain, and we are not expecting a quick recovery.”

Shell's share price for year up to 29/10/09 Shell’s share price for year up to 29/10/09. Source: Digital Look

The firm benefited from soaring crude oil prices this time last year, which pushed up its profits during the period.

But prices have now fallen to half the all-time high of $147 a barrel.

Oil and gas production for the third quarter was 2.93 million barrels of oil equivalent per day, flat on the same quarter of 2008.

Earlier this week, Shell’s rival, BP, reported third quarter profits of more than £3bn, down 50% on the same period last year.

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