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Business

Shell profits plunge 62 percent in first quarter

Latest update : 2009-04-29

Royal Dutch Shell Plc has followed the oil industry trend of reporting sharply lower first-quarter profits due to lower crude prices, while outperforming analysts' forecasts.

AFP -  British energy group Royal Dutch Shell said Wednesday that first-quarter net profit plunged 62 percent to 3.488 billion dollars (2.645 billion euros) as oil prices slumped in an economic downturn.

"First quarter 2009 performance was affected by the weaker global economy, with a challenging upstream and downstream business environment," Chief Executive Jeroen van der Veer said in a results statement.

The figure excludes changes in the value of oil held in stock, a key measure for the industry, and compared to net profit totalling 9.083 billion dollars in the first quarter of 2008.

The price of crude oil, which is traded in London and New York, has tumbled from last July's record highs of more than 147 dollars per barrel as the sharp global downturn has slashed worldwide energy demand.

On a "current cost of supplies" basis, which adjusts for changes in the value of oil held in stock, Shell reported earnings of 3.297 billion dollars, down 58 percent from the same quarter last year.

Total oil and gas production fell 4.0 percent to 3.396 million barrels in the three months to the end of March, as output was hit by security concerns in Nigeria.

Group revenues nosedived 49 percent to 58.22 billion dollars in the reporting period, from 114.30 billion dollars previously, Shell said.

"Industry conditions remain challenging, and our focus is on capital discipline and costs," added van der Veer.

"We are taking a prudent approach to this downturn, focused on sustaining a strong position in the energy landscape."

On Tuesday, rival group BP had posted a 62-percent slide in first-quarter net profits to 2.387 billion dollars (1.834 billion euros) as it also took a beating from lower oil prices.

US energy giants Chevron and ExxonMobil are both expected to reveal falling profits later this week.

 

Date created : 2009-04-29

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