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Business News

Shell double its profits to $7.2bn as oil and gas prices spiral higher

Spiralling oil prices and strong demand for gas after the Fukushima nuclear disaster helped Shell double its profits between July and September.

Europe's largest oil company reported third-quarter profits of $7.2bn (£4.5bn), up from $3.5bn a year ago, at a time of continued fuel price misery for British motorists.

Shell has benefited from a 48 per cent rise in oil prices – partly caused by unrest in the Middle East and North Africa – as well as a 2 per cent increase in production, excluding asset sales, compared with a year ago.

Natural gas prices have risen nearly a third after the Fukushima disaster boosted demand as Japan sought alternative sources of power.

Yesterday's figures, which were in line with City expectations, came two days after BP reported a three-fold increase in profits to $5.1bn for the three months to September.

The Anglo-Dutch oil giant said its investments in big new projects, including in Canada and Qatar, were paying off, while the results were also boosted by stronger refining margins. It plans to make 20 new investments between 2011 and 2014.

Earnings at its downstream business, which includes its petrol stations, increased by 24 per cent to $1.8bn.

Its chief executive Peter Voser also said that although Shell had already met its target of $5bn of disposals this year, including the $1.2bn sale of Stanlow refinery in Cheshire, sales of "non-core" assets would continue.

Its shares rose 27p to 2,280p. Richard Hunter, the head of equities at Hargreaves Lansdown stockbrokers, said the results were a reminder of why some investors adhere to the adage "never sell Shell".

He added: "The update may be the cause of some admiring glances from arch rival BP, currently in the midst of its own transformation."