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Shell sees profits surge on oil price rise

By Daily Mail Reporter
Last updated at 8:43 AM on 28th April 2010

Oil giant Royal Dutch Shell today revealed that profits rose almost 50 per cent during the first three months of the year as it joined rival BP in benefiting from higher oil prices.

The Anglo-Dutch firm reported earnings of $4.9bn (£3.2bn) for the first three months of the year – just one day after BP posted profits of $5.6bn (£3.6bn) for the same period.

The profit surge has been fuelled by a marked increase in the price of crude oil. At the height of the recession in 2009, the average price of oil was just above $41 a barrel. In contrast, the average price for the first quarter of 2010 stands at $76 a barrel.

Unveiling today’s figures, Shell chief executive Peter Voser said the rising price of oil and an improved operational performance pushed first quarter profits well above the $1.18bn reported in the last three months of 2009.

The company cut 5,000 jobs last year and will remove another 1,000 in 2010 – mainly in downstream and corporate functions – to make it more competitive against its rivals.

Despite the strong figures, Voser warned of a challenging year ahead. ‘So far in 2010, oil prices have remained firm, and demand for petrochemicals has increased, but refining margins, oil products demand and spot gas prices all remain under pressure,’ he said.

‘Although there are signs of an improving economic outlook, we are not relying on it. We are continuing with our focus on cash flow growth, underpinned by new project start-ups and lower costs.’

Shares in the group held broadly steady when markets opened this morning, rising 1.28 per cent to 2,023.00p.

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