Shares in Royal Dutch Shell yesterday fell more than 2 per cent to the bottom of the FTSE 100 index after Europe's biggest oil major surprised the City with a 13 per cent fall in profit to £5.7bn.
Its chief executive, Peter Voser, pinned the blame on weaker oil and natural gas prices, saying: "The weaker oil and North American gas prices offset the benefit of increased upstream volumes and improved refining margins. Our industry continues to see significant energy price volatility as a result of economic and political developments."
In April, Shell said maintenance work at some of its fields would cut extraction by about 50,000 barrels of oil equivalent a day in the second quarter. Mr Voser said: "We are moving forward in volatile times. Our profits have fallen with energy prices, but our growth strategy is delivering to the bottom line."
The shares slipped 57p, or 2.5 per cent, to 2208p.
Mr Voser said: "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.
Our plans for organic capital investment of about $32bn in 2012 and medium-term financial and production growth are on track."
He added: "Shell has continuous improvement programmes in place to increase operational uptime and performance and to control costs. The new projects we've built in recent years are driving growth in the company today, and our investment decisions should drive oil and gas production for decades to come, with more than 20 key upstream projects under construction today."
The company's cash flow from operating activities for the second quarter came in at $13.3bn, compared with $10bn in the same quarter last year.Reuse content