Royal Dutch Shell Plc  .com Rotating Header Image

Profits soar at Shell

Oil group unveils earnings of nearly £5bn for the last quarter

Profits at Shell soared 77% to nearly £5bn in the last three months, but the oil group said there was little chance of lower prices for motorists, with energy prices due to rise even further in the long term.

Chief executive Peter Voser said there was no point in blaming Shell for high pump prices given that the company made virtually “nothing” on petrol and 60% to 70% of the price for each litre went to the government in taxes.

“It’s the end of low-cost oil and gas. I think we are going into a world where finding the oil and gas is going to be more complex. It needs more money, needs more investment,” said Voser.

The AA motoring group recently said it wanted the European commission to investigate competition in the oil and petrol markets but Shell said only 2% of profits came from any part of its British operations and it mainly benefited from a 49% rise in global crude prices as a result of unrest in the Middle East and Africa.

The enormous earnings – at a time when production actually fell – come two days after BP reported profits for the three months to June of £3.2bn, showing the widening gap between the two, which have been repeatedly mentioned as potential merger partners in recent years.

Voser brushed aside suggestions he might be interested in taking over BP, saying Shell had “more than enough on its plate”, and expressed no enthusiasm for plans being prepared by US rival ConocoPhillips, and also under consideration at BP, to split the business into two companies: one upstream exploration firm, the other a downstream refining operation.

Foreign governments and oil companies wanted Shell as a partner just because of the fact that it had an “integrated” approach, he said. “It would be wrong to lose that. It adds so much value,” Voser added in what looked like a riposte to BP boss Bob Dudley, who indicated a break-up at his company could not be ruled out.

But the Shell chief executive made it clear that talks with Rosneft and the Russian government, once potential strategic partners of BP, were continuing and serious. One of the attractions was to move into the Russian Arctic, said Voser, adding that the company was also keen to expand in Greenland and Alaska.

Shell said it still hoped to drill in the Beaufort and Chukchi seas next year and has been in talks with the US government about lifting a ban on that area, imposed following BP’s Deepwater Explorer accident in the Gulf of Mexico. Discussions on new permits were, said Voser, “moving in the right direction”.

The moratorium, now lifted, in the gulf had lopped 50,000 barrels off Shell’s expected production volumes in the second quarter, while asset sales added to the problem. Shell’s output overall was up 2% with new projects coming on stream in the tar sands of Canada.

Financial analysts liked what they saw at Shell and said there was more good news to come. The oil team at Citigroup believed “the stage is set for an even stronger 2H11 [second half of 2011]”.

Meanwhile, ExxonMobil saw its net income rise 41% to $10.68bn, and said its oil and gas production rose 10% in the quarter, compared to the same period in 2010, entirely thanks to its purchase of XTO Corporation for $30bn last year.


This website and sisters,,,, and, are owned by John Donovan. There is also a Wikipedia segment.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Comment Rules

  • Please show respect to the opinions of others no matter how seemingly far-fetched.
  • Abusive, foul language, and/or divisive comments may be deleted without notice.
  • Each blog member is allowed limited comments, as displayed above the comment box.
  • Comments must be limited to the number of words displayed above the comment box.
  • Please limit one comment after any comment posted per post.