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Shell’s Profit Soars

OCTOBER 27, 2011

By ALEXIS FLYNN

LONDON—Royal Dutch Shell PLC Thursday said its net profit in the third quarter more than doubled, driven by strong oil and rising natural-gas prices as major projects have started to raise production.

Net profit for the quarter totaled $6.98 billion, compared with $3.46 billion a year earlier. Revenue was $123.41 billion, compared with $90.71 billion.

The results reveal that the company is reaping rewards for its heavy investment in new infrastructure, some of which enables it to turn less valuable hydrocarbons like natural gas and oil sands into high quality transport fuels and lubricants.

“We continue to make good progress with our strategy—improving our competitive performance, delivering a new wave of production growth, and maturing the next generation of growth options for shareholders,” said Shell’s Chief Executive Peter Voser.

The Anglo-Dutch energy company said the clean-current cost of supplies, a keenly watched figure that strips out gains or losses from inventories and other non-operating items, was $7 billion in the three months to Sept. 30, compared with $4.93 billion a year earlier and above expectations of $6.60 billion.

Shell’s oil and gas production totaled 3.01 million barrels of oil equivalent a day in the third quarter, a decline of 2% on a year-to-year basis owing to asset sales. Analysts were expecting production to rise 0.5%. Absent the 100,000 barrels of oil equivalent a day lost due to these divestments, Shell said its production increased 2% from a year earlier.

Shell said it continued to benefit from the contribution of new project start-ups like the Pearl gas-to-liquids plant. New gas-field start-ups and the continuing development of gas fields contributed 270,000 barrels of oil equivalent a day to its quarterly output.

Diluted earnings per share were 112 cents, compared with 56 cents the previous year.

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