Royal Dutch Shell reported yesterday a 49% surge in first-quarter profits as the energy giant joined rival BP in benefiting from higher oil prices.
The Anglo-Dutch group reported earnings of £3.2billion for the first three months of the year, a day after BP posted profits of £3.6billion for the quarter.
Shell’s chief executive Peter Voser said rising energy prices and an improved operational performance meant Shell’s profits were sharply higher than the £766million in the final quarter of 2009.
The company’s performance has lagged behind BP as it has been forced to ramp up spending to secure new sources of oil and gas at a time when refining margins are under pressure due to global overcapacity and economic weakness.
Shell cut 5,000 jobs last year from its global workforce of 110,000 and will remove another 1,000 in 2010, mainly in downstream and corporate functions, to make it more competitive against its rivals.
Aberdeen, where Shell employs about 1,800 in its UK hub for upstream activities – exploration and production – is not expected to see much impact from the latest job cuts.
Mr Voser, who said the company’s results had improved considerably, claimed the recent turnaround was largely driven by Shell’s own actions.
He added: “The priorities are for a more competitive performance, for growth, and for sharper delivery of strategy. There is more to come from Shell.”
Mr Voser said there were mixed signals for the near-term outlook.
“So far in 2010, oil prices have remained firm, and demand for petrochemicals has increased, but refining margins, oil products demand and spot gas prices all remain under pressure,” he said.
“Although there are signs of an improving economic outlook, we are not relying on it. “We are continuing with our focus on cash-flow growth, underpinned by new project start-ups and lower costs.”
Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said the results were comfortably ahead of forecasts.
Shell’s shares in London gained 46.5p or 2.33% yesterday to £20.44.
Oil futures prices rose in New York yesterday in volatile trade as a drop in petrol stocks in the US and moves towards help for heavily indebted Greece overshadowed mounting US crude stocks.
Crude for June delivery traded up 78 cents to settle at $83.22 a barrel.
In London, Brent crude for June delivery ended up 38 cents at $86.16.
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