London Evening Standard: Shell shares in oil profits glut: “This performance will also assuage concerns over Shell's management and operative efficiency after the devastating reserves scandal last year.” (ShellNews.net) 28 April 05
Adrian Lowery, This is Money,
28 April 2005
ROYAL Dutch/Shell this morning confirmed that the oil sector is reaping massive profits from soaring world oil prices.
The world's third-largest oil group reported a 28% rise in first-quarter profits that beat average City expectations. Shell said current cost of supply earnings (the sector's preferred measure) rose to $5.55bn (£2.92bn). The consensus forecast was $4.7bn.
It also announced a first-quarter dividend of 4.55p. 'The results are much better than expected, and we consider them as positive,' Bank Oyens & van Eeghen's analyst Margarita Shevtsova told Reuters.
'It is possible for them to increase their share buy-back programme because they have a strong cash position,' she added.
Shell's rival, BP, the world's second-largest oil company, on Tuesday reported a 29% surge to a record net profit for 2004, also well ahead of City forecasts.
This week's figures are bound to raise motorists' hackles and increase calls for a windfall tax on oil profits. Fuel price protestors on Monday blockaded a Shell refinery in Cheshire, and more protests are scheduled before the General Election.
Shell is preparing for a new phase in its history when its Dutch and UK parent companies merge this year. The company will also announce its first quarterly dividend today.
This performance will also assuage concerns over Shell's management and operative efficiency after the devastating reserves scandal last year. It appears that with finances in such rude health the oil giant has breathing space to recover its reserves to the superior levels of its rivals.
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