Business
Rising oil prices fuel Shell's Q4 profit
(China Daily)
Updated: 2010-02-05 07:58
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A Shell employee at a gas station in London. The firm is streamlining its operations in a bid to catch up with BP. Bloomberg News |
AMSTERDAM: Royal Dutch Shell Plc, which vies with BP Plc as Europe's biggest oil company, posted a profit in the fourth quarter after a slump in oil prices led to a loss in the year-earlier period.
Net income of $1.96 billion compared with a loss of $2.81 billion a year ago, The Hague-based Shell said in a statement yesterday. Excluding one-time items and gains or losses from inventories, earnings met analyst estimates.
Chief Executive Officer Peter Voser is cutting thousands of jobs and streamlining Shell's operations in an attempt to catch up with BP in terms of output. Oil prices had their biggest annual gain since 1999 last year after plunging 54 percent in 2008, keeping refining margins under pressure as the recession weighed on fuel demand.
"Refining margins have hit multiyear lows during this quarter," Alexandre Weinberg, a Brussels-based analyst at Petercam SA, said before the earnings were released. "Until now, new management has been bolder in taking critical decisions than the previous team and we therefore believe that tackling the refining issue is high on their agenda."
BP posted net income of $4.3 billion in the latest quarter. Exxon Mobil Corp, the largest US company, posted a fifth straight drop in quarterly profit earlier this week to $6.05 billion.
Shell's earnings excluding one-time items and gains or losses from inventories were $2.8 billion. That compared with the $2.88 billion median estimate of 14 analysts surveyed by Bloomberg.
Shell's class-A shares were up 2.5 percent in the past year, compared with an 15 percent advance for London-based BP.
Swiss-born Voser, who inherited the industry's biggest spending program last year after taking over from Jeroen van der Veer as CEO, is seeking to revive production growth and reduce Shell's exposure to refining.
About 15 percent of Shell's refining capacity has been placed under review.
Global refining margins, or profits from turning crude into fuels, slid 71 percent in the fourth quarter from a year earlier, according to BP data.
Bloomberg News
(China Daily 02/05/2010 page14)
