Shell posts record profits

Friday, 30 January 2009, 02:38 Hrs
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London: Anglo-Dutch oil giant Royal Dutch Shell Thursday reported 2008 profits of $31.4 billion, despite a sharp fall in earnings in the last quarter due to tumbling oil and gas prices and the global economic downturn. Shell, the first major oil company to report results for last year, said profits for the final three months of 2008 fell to $4.8 billion, down 28 percent from the same period a year ago, and 56 percent lower than in the previous quarter. However, for 2008 as a whole, the company increased profits by 14 percent to a record $31.4 billion, after oil prices peaked at around $150 a barrel last summer. Shell chief executive Jeroen van der Veer described the fourth quarter performance as "satisfactory, given the impact on demand caused by the weaker economy. He pledged to maintain investment at near to last year's level of $32 billion in order to safeguard future profitability. "Industry conditions remain challenging, and we are continuing the focus on capital and cost discipline in Shell," he said. Full-year oil and gas production was broadly in line with the previous year, the company said. Analysts in London said the results were towards the bottom end of expectations, but Shell had cheered investors by announcing an 11-percent increase in its fourth quarter dividend. In Amsterdam, Peter Heijn from Theodoor Gilissen Private Bankers said it was important that Shell said it hoped to raise its expected dividend by 5 percent in the current quarter. "This indicates the board feels confident about today's state of affairs with the current oil price," he said. In London and Amsterdam, shell shares rose after publication of the 2008 results. Analysts in London pointed out that Shell's oil and gas production in the fourth quarter was virtually unchanged from the same period in 2007, at 3.4 million barrels a day. Shell has previously said that it is planning to arrest a decline in production in key centres such as Nigeria and Russia by developing oil sands in Canada and establishing a gas-to-liquids venture in Qatar. "These are not top-draw results from Shell," said Keith Bowman at financial service provider Hargreaves Lansdown. "All in all, despite enviable cash flows and low borrowing levels, Shell, as with industry in general, is suffering under the weight of the global economic decline."
Source: IANS
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