Shell unveils £1.5m-an-hour profit

Royal Dutch Shell reignited anger over excessive profits today after revealing it made $27.6 billion (£13.9 billion) in 2007 - a new record for a UK company.

The figure - equivalent to more than £1.5 million an hour - prompted a fresh call from unions for a windfall tax on oil companies. It also comes at a time when motorists are paying forecourt petrol prices of more than £1 a litre.

Royal Dutch Shell's profits haul for 2007 was 9 per cent higher than a year ago and comes after the price of crude oil rose towards 100 US dollars a barrel.

The Unite union said profits in the industry were "obscene" and urged the Government to take action, especially because of rising energy prices.

Joint general secretary Tony Woodley said: "Shell shareholders are doing very nicely whilst the rest of us, the stakeholders, are paying the price and struggling."

Mr Woodley said that amount of money, added to oil industry profits he put at more than £50 billion in the last three years, was "quite frankly obscene".

He added: "This Government took the brave step of putting a windfall tax on the greedy privatised utilities to fund the New Deal. With pensions injustices still to be addressed, fortune should favour the brave again and the greedy oil companies should be asked to contribute for the common good."

The oil firms, including Shell, argue that they make very little money from forecourt operations, adding that they already pay high levels of tax to the Treasury. In 2005, Chancellor Gordon Brown increased a North Sea tax on energy companies from the 10 per cent he introduced in 2002 to 20 per cent.

Today's figures benefited from a better-than-expected finish to 2007, with fourth quarter profits ahead 11 per cent at $6.68 billion (£3.36 billion). That was higher than consensus forecasts for a figure of around $5.82 billion (£2.95 billion).

The boost came from exploration and production, with the division posting earnings of $4.87 billion (£2.45 billion), against $3.54 billion (£1.78 billion) a year earlier.

This reflected the impact of higher oil and gas prices on revenues, which was partly offset by lower production volumes, higher taxes and rising costs.

Shell has also ratcheted up capital spending to seek out new sources of oil and gas, with chief executive Jeroen van der Veer selling off maturing assets to "rejuvenate" the oil major's portfolio.

He said today: "Overall these are satisfactory results. We made good progress in 2007, launched new projects upstream and downstream, and achieved exploration successes."

AA spokesman Andrew Howard said the responsibility of the oil companies was to produce enough oil to meet world demand.

A windfall tax would just mean more money going to the Government, and less spent on exploration and building new refineries, he said.

"It's a little bit unfair to criticise the oil companies.

"The world market decides oil prices, not the oil companies.

"It's the world market that leads to oil companies making big profits."

Countries such as India and China, which do not produce their own oil, were pushing up the price through increased demand, he said.

"The oil companies need to reinvest this profit back into securing future supplies, and hopefully pushing prices down. They need to explore new oil fields and build more refineries so that there is no shortage in world supply.

"The key measure is whether, when the world oil price comes down again, petrol prices come down as fast as they went up when the oil price went up. That will show whether the oil companies are profiteering."

He added: "What the Government can do is not put 2p on a litre in April. But every time the fuel price goes up the Government makes its own windfall."

Kate Gibbs, spokeswoman for the Road Haulage Association, said: "Everyone that works, works to make a profit, but the profits announced today are above and beyond.

"If the general haulier tells you he is breaking even then he is doing well. A lot of them are operating at a loss because they have to keep passing on the price of fuel. What we would like to see is something taken off the pump price, but we don't live in a perfect world."

She said hauliers could not face another 2p on the price of petrol in April.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower