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Shell profits jump 77% on higher oil prices

28 July 2011 Last updated at 14:16

Oil giant Royal Dutch Shell has reported a 77% jump in second-quarter profit, thanks to higher energy prices.

Shell’s profit for the three months to June came in at $8bn (£4.9bn) on a current cost of supplies basis, up from $4.5bn in the same period last year.

Though oil and gas production was 2% lower than the same quarter in 2010, the company said it had benefited from asset sales in the first half of 2011.

Earlier this week, rival BP announced second-quarter profits of $5.3bn.

On Thursday, larger US rival Exxon Mobil said that net profit rose 41% to $10.7bn for the three months to June from the same period last year.

New projects

The price of oil is much higher now than it was a year ago, in part inflated by political unrest in oil-producing countries such as Libya.

Twelve months ago, US light sweet crude oil was trading at about $78 a barrel. It is currently trading at about $97 a barrel, having topped $110 at the end of April.

Shell also said it had sold $4bn of non-core assets in the first six months of the year, which was a “key driver” to reducing costs and improving its operating performance.

However, like BP, Shell’s production was down in the second quarter year-on-year, due to field sales and warm weather which hit European gas demand.

But the company said it had started three large-scale projects this year that would add to its oil production by over 400,000 barrels per day.

These are a Canadian oil sands venture and two gas plants in Qatar, in which it has invested $30bn.

“We have made important progress with new production in 2011, and the ramp-up of our new projects should drive our financial performance in the coming quarters,” said Shell chief executive Peter Voser.

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