Shell cashes in on soaring oil prices with 77 per cent jump
Friday 29 July 2011
Royal Dutch Shell cashed in on rising energy prices yesterday as it reported profits of nearly £5bn between April and the end of June. The second-quarter haul, which comes at a time of continued fuel price misery for British motorists, represented a jump of 77 per cent on a year earlier.
The company said it benefited from a 49 per cent rise in oil prices – partly caused by unrest in the Middle East and North Africa – as well as an improved operating performance, although asset sales meant production fell 2 per cent in the period. The figures, which were in line with market expectations, come two days after BP reported profits for the three months to June of £3.2bn.
Shell's chief executive Peter Voser defended the company's profits as he pledged to deliver a "new wave" of production growth. "Shell reinvests its profits to meet customer demand for low cost energy, and to pay attractive returns to shareholders," he said.
The oil and gas giant has said it plans to invest $100bn (£62bn) in new projects over the next four years, including projects in Qatar and Canada this year. It has set a target of 3.7 million barrels of oil equivalent per day for 2014, an increase of 12 per cent on 2010 levels, which it claims is among the highest growth rates in the sector.
Shell has also benefited from a turnaround in the profitability of its downstream operations, with quarterly profits up 28 per cent on a year earlier to $1.88bn.
Mr Voser has responded to more difficult conditions in downstream through restructuring initiatives and has refocused the Anglo-Dutch firm's efforts on emerging growth markets.
The group also said it had chosen a joint venture between the developer Canary Wharf Group and a unit of Qatar's sovereign wealth fund, Qatari Diar Real Estate Investment Company, to redevelop its 5.25-acre Shell Centre headquarters on London's South Bank for £300m in cash.
Under the deal, Shell will remain in the tower and will lease an extra 210,000 sq ft in a new building on the site for its London headquarters.
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