Shell profit doubles on higher energy prices, new projects

Updated: 2011-10-28 08:04

(China Daily)

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LONDON - Royal Dutch Shell PLC, Europe's biggest oil company, said third-quarter profit doubled as energy prices rose and it ramped up projects from Qatar to Canada.

Net income increased to $7 billion from $3.5 billion a year earlier, Shell said on Thursday in a statement. Excluding one-time items and inventory changes, earnings beat analyst estimates.

Chief Executive Officer Peter Voser is seeking to boost output with a $100 billion investment plan through 2014, including the Pearl gas-to-liquids and Qatargas 4 liquefied natural-gas (LNG) projects and an upgrade at an oil-sands project in Alberta, Canada. Shell has sold about $6.2 billion of assets this year, exceeding a $5 billion target.

"We are making good progress against our targets, to deliver a more competitive performance," Voser said in the statement.

Adjusted earnings of $7 billion compared with the $6.6 billion mean estimate of 12 analysts surveyed by Bloomberg.

Earlier this week, BP PLC also reported profit that beat analyst estimates and increased an asset sales target by 50 percent to $45 billion. Statoil ASA, Norway's biggest energy producer, said on Thursday that output rose for the first quarter in five as earnings fell on higher taxes.

LNG sales

LNG sales volumes increased 12 percent to 4.76 million tons from the year-earlier quarter, Shell said.

Overall production fell 2 percent to 3.012 million barrels of oil equivalent a day. New fields contributed about 270,000 barrels of oil equivalent a day.

Shell's cash flow benefited from a 33 percent gain in UK gas futures and a 46 percent increase in Brent oil prices from the year-earlier quarter.

Shell received its first contribution from a $12 billion biofuels joint venture with Cosan SA Industria & Comercio in Brazil, it said on Thursday.

It was involved in two exploration discoveries in French Guiana and Australia. Shell also secured new exploration projects in the Americas, Tanzania and New Zealand.

Of the 31 analysts that cover Shell, 24 recommend buying the shares and seven have "hold" ratings.

Singapore refinery

Shell expects to return its Pulau Bukom refinery in Singapore to full capacity in December, after a fire in September.

"We have restarted most of the units now," Chief Financial Officer Simon Henry said, declining to give output rate and product-export volume details. "So far, so good in terms of the recovery."

Shell expects to take a charge of about $150 million post-tax in the fourth quarter resulting from the incident last month, he said.

The company is delivering to some customers without lifting all force majeure declarations, Henry said.

The company is investigating the cause of the Sept 28 fire that closed its largest plant. The refinery has a crude-processing capacity of 500,000 barrels a day.

Bloomberg News

(China Daily 10/28/2011 page17)