Sydney Morning Herald: Oil price surge fires up Shell: “Shell, the oil and gas giant which is trying to recover its reputation after last year's reserves scandal, posted a 48 per cent jump in first-quarter profits as a result of the surging oil price and high refining margins. However, overall production fell…” (ShellNews.net) 30 April 05
By Christopher Hope
April 30, 2005
Shell, the oil and gas giant which is trying to recover its reputation after last year's reserves scandal, posted a 48 per cent jump in first-quarter profits as a result of the surging oil price and high refining margins.
However, overall production fell 2 per cent to 3.85 million barrels of oil equivalent a day, excluding divestments. Shell has recently increased spending on exploration and production to ramp up its production rate.
Overall pretax profits rose 48 per cent to $US11.3 billion ($14.4 billion) on a 26 per cent rise in revenue to $US72.2 billion for the three months to March 31, helped by an oil price which for Shell averaged $US43.84 a barrel.
Like rival BP, Shell is planning to return some of its profits to shareholders. Finance director Peter Voser said between $US13 billion and $US15 billion would be given back to investors in the form of dividends and share buybacks.
Shell said that in the first quarter it spent $US500 million buying back and then cancelling its own shares, a process which can help to support the share price for other investors.
AdvertisementChief executive Jeroen van der Veer brushed aside concerns about the low hydrocarbons' ouput - oil production was down 8 per cent to 2.14 million barrels a day - claiming that the total figure was "at the higher end of expectation for the quarter". Shell said it was still confident it would be able to increase its reserve replacement ratio to over 100 per cent over the next five years.
Shell, which last year revealed that it had overstated its proven oil and gas reserves by more than 25 per cent, is in talks with the US Securities and Exchange Commission over its reserves statements for 2004.
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