Shell trumps BP by posting strong profits
ROYAL DUTCH SHELL eclipsed rival BP yesterday after posting second quarter profits of $4.5bn (£2.9bn) almost doubling last year’s numbers.
The rise from $2.3bn a year ago came after the Anglo-Dutch oil giant underwent a radical year-long restructuring, which delivered $3.5bn in savings, and axed around 7,000 jobs. Profits were helped by higher refining margins than a year earlier, as well as higher oil and gas prices than in 2009, when much of the global economy was still in recession.
Shell’s profits place the company well ahead of embattled BP, which reported quarterly losses of $17bn earlier in the week as a result of the devastating Gulf of Mexico oil spill.
Peter Voser, Shell’s chief executive officer said the company’s performance was good despite continual challenging macro economic conditions.
Shell, which will pay out a $2.4bn dividend, revealed plans to sell off up to $8bn in assets through the course of next year.
“We will exit from non-core positions, both in upstream and downstream as we refocus our portfolio on material positions with growth potential,” said Voser.
However, Shell’s offshore drilling business in the US was hit by a six-month moratorium on deep sea drilling, which the Obama administration imposed after the explosion of the Deepwater Horizon rig on 20 April.
Shell has already taken a $56m hit as a result of the ban.
“[Shell] will be one of the most affected by the Gulf BP accident and subsequent US government drilling moratorium there…due to its large operation,” said Christine Tiscareno, at Standard & Poor’s Equity Research.
Voser said he would consider reclaiming the money from BP.