Oil giant Royal Dutch Shell became the latest energy major to report a sharp increase in second-quarter profits on the back of high oil prices.
Shell outpaced rival BP yesterday, posting a 71% increase in pre-tax profits to £9billion, or about £1,144 a second, for the three months to June 30
The growth was driven by its upstream business, although production dropped 2% because of the impact of asset divestments. Shell said downstream activities slumped on lower oil products and chemical sales.
Analysts pointed to across-the-board rises in profits at the majors but this masked lower crude and natural gas production.
Shell chief executive Peter Voser highlighted the UK-Dutch group’s growth programme, which has resulted in the launch of three new large-scale projects this year: a Canadian oilsand venture and two gas plants in Qatar, including the Pearl gas-to-liquids plant.
Mr Voser said: “We have made important progress with new production in 2011 and the ramp-up of our new projects should drive our financial performance in the coming quarters. Shell continues to mature new projects for medium-term growth.”
Shell is a 36% owner in the £3billion Schiehallion redevelopment project with BP, which was agreed earlier this month.
In May, Shell agreed major finance for the massive Prelude floating LNG (liquefied natural gas) production vessel project – described as a first in the industry – and it has also entered into a biofuels production and retail joint venture in Brazil.
The group sold around £2.5billion of non-core business during the first half of 2011 as part of a capital efficiency and portfolio enhancement programme and is in the midst of decommissioning six platforms and infrastructure from its UK southern North Sea Inde field.
However, it followed BP in batting off suggestions it should follow in the footsteps of ConocoPhillips by splitting into upstream and downstream businesses.
Revenue for the second quarter totalled £64billion, compared with £55billion in the same period last year and £109billion in the first quarter.
For the half year to the end of June, pre-tax profits totalled £19billion, against £11.3billion a year earlier: a rise of 67%.
Shell’s results come just days after BP posted figures which disappointed investors. Its pre-tax profits for the second quarter were £5.3billion, compared with losses of £14.9billion in the same period in 2010 as the company reeled from the costs of the US oil spill.
BP’s revenue for the second quarter was £61.9billion.
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