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CORPORATISM -
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Royal Dutch Shell sees profits gush

Posted in the database on Thursday, October 27th, 2005 @ 18:50:56 MST (1508 views)
from Turkish Press  

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A Shell petrol station board shows the price of a gallon of fuel in Washington in August. Oil giant Royal Dutch Shell reported a 68-percent surge in third-quarter net profit, owing to record energy prices and asset disposals, but the recent US hurricanes forced it to cut production estimates.

Oil giant Royal Dutch Shell reported a 68-percent surge in third-quarter net profit, owing to record energy prices and asset disposals, but the recent US hurricanes forced it to cut production estimates.

The strong profits picture Thursday meanwhile contrasted with a public relations crisis 12 months ago arising from mis-statement of oil reserves.

Royal Dutch Shell said net profit, excluding gains from the value of its crude oil inventories, surged to 7.369 billion dollars (6.081 billion euros) during the third quarter compared with 4.381 billion dollars in the same period a year earlier.

Analysts' consensus forecast had been for a profit of 5.165 billion dollars.

Exxon Mobil, the world's biggest oil company, posted a 75-percent surge in third-quarter net profit Thursday to 9.92 billion dollars, while British rival BP earned 4.41 billion dollars after tax during the same period.

"Our operational performance is paying off with good results," Royal Dutch Shell chief executive Jeroen van der Veer said on Thursday.

The Anglo-Dutch group, formed from the union of Royal Dutch Petroleum and Shell Transport and Trading in July, saw the price of its 'B' shares rise 1.35 percent to 1,801 pence and its 'A' shares gain 1.30 percent to 1,713 pence in late London deals.

The capital's FTSE 100 index meanwhile fell 0.98 percent to 5,176.80 points.

Royal Dutch Shell's third-quarter profit figure included an exceptional gain of 1.77 billion dollars, mainly from the sale of pipeline assets held through Gasunie in the Netherlands.

Shell meanwhile gained from soaring oil prices, which reached a historic high point of 70.85 dollars per barrel on August 30, the day after Hurricane Katrina had battered oil facilities in the US Gulf of Mexico.

The profit surge came despite a fall in Royal Dutch Shell's production to 3.207 million barrels of oil equivalent per day (boepd) during the quarter from 3.608 million a year earlier, owing to hurricanes hitting its major production and refining facilities in the United States.

Royal Dutch Shell said it lost around 160,000 boepd in the Gulf of Mexico in the third quarter after hurricanes Katrina and Rita struck the area in late August and September.

The group said it expected volumes for 2005 to average 3.5 million boepd, at the low end of its guidance of 3.5-3.8 million. For 2006, it forecast output to be at the "lower half" of its target of 3.5-3.8 million boepd.

Shell said it would incur 350 million dollars in hurricane-related costs in 2005 and 2006, though it stressed that a "significant" portion of that was covered by insurance.

Royal Dutch Shell's results meanwhile come following a quarter in which the energy giant moved to a more traditional single-board structure with one chairman and one chief executive, scrapping its dual-board arrangements based in Britain and the Netherlands.

The historic move was triggered last October after an internal crisis caused by the miscalculation of the group's oil and gas reserves.



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