shell chief says oil prices set to stay low

OIL PRICES are likely to remain at low levels for some time, according to John Jennings, chairman of Shell Transport and Trading.

'The ingredients for a structurally weak market are all too evident,' he said yesterday, citing sluggish growth in demand and the continuing reluctance of Opec members to cut back production.

Mr Jennings was speaking as the Royal Dutch/Shell Group of companies reported a 2 per cent fall in net income from pounds 3.06bn to pounds 3bn in 1993 and a 9.6 per cent increase in total dividends to 24p with a final of 13.8p against 12.6p.

Shares in Shell fell sharply in London, closing 23p down at 699p. 'At first glance the figures look to be at the bottom end of the range of forecasts for Royal Dutch/Shell but a very strong performance at the operating level was depressed by large non-recurring charges,' said Nick Clayton, oils analyst at Nomura.

Mr Jennings said Royal Dutch/ Shell's results had suffered a pounds 1.1bn swing during 1993 from a combination of a pounds 496m charge for restructuring and the absence of currency benefits from sterling's devaluation in late 1992.

Despite a dollars 2.30 fall in average oil prices to dollars 17 a barrel during 1993, including a dip to dollars 13.50 in December, exploration earnings rose by 7 per cent to pounds 2,000 with the help of record natural gas sales.

Downstream profits in refining and marketing jumped by 55 per cent to pounds 2bn on the back of improved margins and previous cost- cutting, but losses in chemicals swelled from pounds 206m to pounds 409m after an increase in restructuring charges from pounds 86m to pounds 336m.