Royal Dutch Shell Plc  .com Rotating Header Image

Royal Dutch Shell profits hit by oil price volatility

26 July 2012

Royal Dutch Shell has reported a 13% drop in second quarter profits, hit by weaker oil and North American gas prices.

The fall in energy prices offset higher production as the company struggled to control costs.

Europe’s biggest oil company said profits fell to $5.7bn (£3.7bn) in the April-June period compared to $6.6bn a year earlier, the company said.

Shell’s share price closed down 2.31% as investors were disappointed.

“We are moving forward in volatile times. Our profits have fallen with energy prices, but our growth strategy is delivering to the bottom line,” said chief executive officer Peter Voser.

“Our industry continues to see significant energy price volatility as a result of economic and political developments. Shell is implementing a long-term, consistent strategy against this volatile backdrop,” he added.

Oil and gas production volumes were 4% higher at 3.1 million barrels a day in the second quarter compared with a year earlier, said Shell.

The company is investing about $32bn this year on capital investment, with more than 20 upstream, or exploration and production projects, under construction.

As part of its global exploration programme, Shell said it had spent some $1bn on new acreage positions in the first half of this year, including deepwater, shale and tight gas, which is difficult to access.

The Netherlands-based group is currently working on a number of projects in Canada, Australia, Oman, the UK and Mexico.

Exxon Mobil

Meanwhile Exxon Mobil, the world’s biggest oil company, said net profit rose 49% in the second quarter to $15.9bn, up from $10.68bn a year earlier.

But the figure was boosted by the one-off sale of its stake in its Japanese refining and chemicals business earlier this year and tax-related items, said the Texas-based group.

Excluding the sale, net profit fell 22% to $8.4bn, the group’s smallest profit since the third quarter of 2010.

Exxon said its oil and gas output fell 5.6% to 4.15m barrels a day during the April-June period, from a year earlier.

Exxon Mobil and Russia’s Rosneft in April signed a landmark deal to jointly develop the Arctic’s rich untapped reserves.

BG Group

Earlier on Thursday, British gas trading and energy company BG Group said its operating profit fell in the second quarter due to a $1.3bn write-down of its US shale gas assets.

BG’s revenue for the quarter was up 9% to $5.6bn from a year earlier as operating profit fell by 8% to $1.9m.

“There are certain dimensions of the (US) economy that are not particularly positive. US retail consumption is a major part of the global economy, let alone the US economy, and there are some concerns about that,” chief executive Frank Chapman said in a statement.

He also blamed a drop in its European production due to a shut-down at the Elgin/Franklin field due to a gas leak there earlier this year. While the facility is operated by France’s Total, BG has around a 14% stake in it.

On top of that, the deferral of starting up the Jasmine field to 2013 also exacerbated BG’s business.

The combined factors are expected to reduce the year-end production by some 50,000 barrels of oil a day, Mr Chapman said.

SOURCE

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, 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.