Shell profits slip

on 01/11/2012 11:44:28

Royal Dutch Shell suffered a 15% drop in profits today in what it describes as "volatile" energy markets.

Lower oil and gas prices and pressure on margins in chemicals resulted in a fall in profits to US$6.13bn (€4.7bn) in the three months to September 30, although this beat the previous quarter.

Analysts were pleased with today's figures however, causing shares to rise 1%, while chief executive Peter Voser said the company continued to make progress despite difficult industry conditions.

Shell has sold assets in recent years as it looks to fund projects with greater growth potential.

Capital investment in the second quarter was $8.8bn (€6.7bn) as the company looks to spend around $32bn (€24.6bn) this year.

Shell has more than 20 projects under construction.

Mr Voser said: "Shell is driving a long-term and consistent strategy, against a backdrop of volatile energy markets."

He added that the level of profit was necessary to pay for the investment in new energy supplies and for dividends to shareholders.

Excluding the impact of disposals, Shell increased upstream production by an underlying 1% to 2.98 million barrels of oil equivalent a day in the quarter - helped by progress on projects in Qatar and Canada.

While there was a recovery in refining margins, the contribution from chemicals and marketing was lower.

Tony Shepard, an analyst at Charles Stanley Stockbrokers, said: "Shell is performing well against its long-term strategy."