Shell's $9bn the biggest oil profit ever
October 28, 2005
By Stephen Voss and Mathew Carr
London - Boosted by surging fossil fuel prices, Royal Dutch Shell yesterday posted a third-quarter profit of $9 billion (R60 billion), a record for the industry. The net income, which included a gain of $1.77 billion from the sale of a natural gas pipeline, was up 70 percent from a year ago.
Chief executive Jeroen van der Veer said that new projects were about to start in Oman and Nigeria and that Shell's drilling results had been encouraging, after the company last year admitted lying about its reserves.
"The results are great but the key thing is the stability of the strategy," said Yoon-Chou Chong of Aberdeen Asset Management.
Earnings have been boosted across the industry by soaring oil prices, which peaked at $70.85 a barrel in New York at the end of August after Hurricane Katrina shut down much of the US's Gulf of Mexico oil production.
Shell was the hardest-hit oil company by Katrina and last month's Hurricane Rita. The company said yesterday that the Mars offshore platform, which pumped about 5 percent of its oil, would stay shut for at least eight more months of repairs.
Profit before exceptional items came in above analysts' estimates at $5.8 billion. CSFB analyst Edward Westlake yesterday raised his recommendation on Shell to outperform from neutral. The shares rose as much as 1.9 percent in London as most other oil stocks fell.
- Bloomberg
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