The Courier & Advertiser (Fife Edition)
Oil price rise helps Shell boost earnings
Energy: Oil major says BG takeover is starting to pay dividends
Royal Dutch Shell more than doubled its earnings in the first three months of the year amid a bounce-back in the sector thanks to rising crude prices.
The group said underlying earnings on a current-cost-of-supply basis surged to £3 billion from £1.2bn a year earlier.
It follows an impressive first quarter for the sector, with rival BP returning to profit earlier this week and US giants Exxon-Mobil and Chevron also posting better-than-expected earnings.
Group chief executive Ben van Beurden said it had been a “strong quarter for Shell”.
He added that the group’s takeover of smaller rival BG Group, which completed last year, was starting to pay off.
Shell has sold off around £16bn of assets since its acquisition of BG, while earnings have also been boosted by hefty cost-cutting over the past three years.
Shell’s upstream business, which includes exploration and production, swung out of the red with underlying earnings of £420 million against losses of £1.1bn a year earlier.
The downstream business, which includes refining, saw underlying profits rise 24% to £1.9bn.
“We continue to reshape Shell’s portfolio and to transform the company with over $20 billion divestments completed or announced that will strengthen the balance sheet as they are completed,” Mr van Beurden said.
“The strategy we have outlined to deliver a world-class investment case is taking shape.
“Following the successful integration of BG, we are rapidly transforming Shell through the consistent and disciplined execution of our strategy.
“This includes investing around $25bn this year and the delivery of new projects, which we expect to generate $10 bn in cash flow from operating activities by 2018.”
Shares in Shell closed 2 points up at 2,062 following trading yesterday.
Weare rapidly transforming Shell through the consistent and disciplined execution of our strategy. BEN VAN BEURDEN