Shell Q2 profits soar on better margins
Filed under: Company, Financial Crisis, Energy
It must be hard for Shell not to feel a tad smug. Second quarter profits from the oil giant have almost doubled to £2.9bn compared to around £1.5bn a year ago.Compare that, in contrast, to BP's recent $17bn loss. Shell has confirmed it will pay a second quarter dividend of $0.42 a share. It's heartening news for Shell with underlying profits - $4.21bn - beating most analyst estimates.
What comes around
Royal Dutch Shell remains confident that their own deep-sea drilling operations have changed little since BP's disastrous Gulf of Mexico blow-up. Shell also confirmed it was sticking to its production growth targets - oil and gas production is up 5% - announced earlier in the year.It's quite a reversal in fortunes. Just a few years go the writing was on the wall for Shell when it grossly underestimated its oil reserves - and was thoroughly punished for its carelessness by investors.
Shell's latest profits news though is at the expense of 7,000 jobs. It's also uncertain just what will happen to its plans in Alaska - hugely important for Shell - and the Gulf of Mexico, given the US deepwater drilling ban.
Sure of Shell?
However the company is gaining from its Gbaran-Ubie oil and gas project in Nigeria which will see around 70,000 barrels of oil a day, once fully operational. A new Qatari exploration agreement is also a boost. What hasn't been made public yet though is details about Shell's own deepwater well design and how it compares with BP's. There's also been concern that both companies are failing to operate rigs to sufficient standards. HSE 'improvement notices' were recently served to both.
More global safety legislation is also on the way, which inevitably has to crimp future production and prospects for most large oil companies. Investors' take note.
Links (opens in new window)
Royal Dutch Shell profits almost double - BBC
Shell chief defends deep-water drilling - FT
Shell's flagship field feels pain of US drilling ban - WSJ
Reader Comments (Page 1 of 1)
7-29-2010 @ 10:27AM
K.P said...
£2.9bn is nothing short of profiteering, from all people that need to get to work using a car, due to the lousy, over expensive, unreliable public transport, failing to be a viable alternative.
I am fortunate not to own/need a car, but I know so many people that need it to earn a living and are scraping by why these companies fill their pockets.
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7-29-2010 @ 11:14AM
bobclarebrough said...
I do understand your feelings, K.P., but let's not forget that petrol only costs about 40p per litre - it's the government that piles on the taxes that takes the price to £1.20 (or whatever today's outrageous price is).
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