Record Oil Prices Drive Shell 1q Profits Up 25 Percent

[Reaper]

Seems to me that all they are doing is making major money while the economy suffers. How is it that they can get away with the excuse that they are not making any money and that its all going toward progress and rebuilding?

By TOBY STERLING, AP Business Writer

AMSTERDAM, Netherlands - Royal Dutch Shell PLC reported a 25 percent rise in first-quarter earnings on Tuesday, crediting strong increases in oil prices.

Europe's largest oil company said its average selling price of crude oil leaped by 66 percent to more than $90 per barrel from the first quarter a year ago.

That sent net profit soaring to a record $9.08 billion, up from $7.28 billion. Sales rose 55 percent to $114 billion.

Analysts said the performance was impressive, especially because expectations were already high. Shell "delivered a very robust overall performance, with all the divisions outperforming the consensus and our estimates," wrote analyst Alexandre Weinberg of Petercam in a note on the earnings.

"Exploration and production numbers were clearly impressive, in spite of higher industry costs and the weak dollar. ... Flow generation from higher hydrocarbon prices might be underestimated for the entire group of majors."

Chief Financial Officer Peter Voser said on a conference call the company wasn't investing money in projects that would require oil prices to remain this high to be profitable. "We don't understand the oil price at this stage," he said. "The fundamentals will not justify an oil price as we see it at the moment."

He said the company is wary of predicting prices apart from a long-term upward trend, but said economists had expected demand to slacken in response to the high prices and with the U.S. economy slowing. However, he said that has so far failed to materialize because of continuing growth in the rest of the world.

He cited a mix of other factors pushing up oil prices including the weak dollar, a rush of speculation on commodities, and ongoing political concerns in the Middle East and in Nigeria.

Shares rose 5.4 percent to 26.07 euros ($40.58).

Earnings from oil production rose 52 percent to $5.14 billion, due almost entirely to the price increases. The company said combined production of gas and oil equivalents increased by less than 1 percent to 3.4 million barrels per day, as a 9 percent rise in gas production outweighed a 6 percent fall in oil production.

Stripping out the impact of oil inventories that have risen in value, refining profits would actually have fallen 20 percent, Shell said.

"It seems that better marketing and trading were able to offset the weak refining environment," Weinberg said, adding that he believes margins have recovered somewhat in the current quarter.

Shell has invested heavily to improve production after a string of setbacks, including an accounting scandal in 2004. More recently, it has faced attacks on its pipelines in Nigeria and a forced sale of part of its stake in a major project on Russia's Sakhalin Island to a state-run enterprise.

One of its new projects, producing bitumen — a heavy form of petroleum — from oil-rich sands and shale in Canada, is paying off. The company reported the segment separately from oil and gas production for the first time and it showed earnings of $249 million, more than doubling from the same quarter a year ago.

Voser said that the company was also investing in resources in or near the Arctic circle which have been difficult to access in the past because of the cold but "quite clearly we see as one source of energy going forward."

[freydis]

WTF?

This is getting absolutely *sick*.

We need alternative fuel cars made NOW.

[Hellion]

This bs is just getting way out of control let alone the whole planet is suffering, getting alternative fuels to be a reality,the oil companies either need to cooperate or be put out of business,getting out of OPEC would be a start.like that will ever happen.

[Gaf The Horse With Tears]

Oil companys make 8cents profit on 1 gallon of Gasoline. The Federal Government makes 18.5 cents per gallen. Your local state Government makes another 15-20 cents depending on the state.

Exxon alone spends a total of 100Million on alternative fuels. BP has one program that gets 100millin per yar for research. UC Berkly just got a $500million dollar grant from BP for research.

How much does our state government give for research?

[Oh_My_Goth]

EVERYTHING is going up because of fuel costs, there are countries having food source crises' because of this.....

When will the Powers That Be do something?????

[creatureofthenyte]

over here in my state, we have the highest gas tax in the country.

Diesel fuel goes for aboot 4.59/gallon here.

I just heard that our state bloodsuckers, errr um legislature, wants to reduce the gas tax here by ten cents from July 1st to Labor day.

BUT our governor is OPPOSED to it.

Its ok though, ten cents a gallon discount isnt really worth shit, if the price is 3.89...ooo ten cents, big whoop.

I just don't understand if CT is one of the smallest states in the country, and supposedly the richest, WHY do the damn taxes have to be sooo damn high!!??