Shell profits near £8billion

Published on Thursday 31 July 2008 09:52

ROYAL Dutch Shell racked up profits of almost £8 billion during the first six months of this year, results from the Anglo-Dutch firm showed today.

The company posted earnings of 15.68 billion US dollars (7.92bn) for the half-year, with the period from April to June up 5% at 7.56 billion US dollars (3.82bn).

Shell said increased oil and gas prices offset the impact of weaker trading conditions in its downstream refining and marketing business.

The figures come in the same week rival BP announced half-year profits of 13.44 billion US dollars (6.75 billion).

Both sets of figures are certain to infuriate hauliers while millions of motorists also feel pain from rising forecourt prices.

Union leaders have called for a windfall tax on the profits of both BP and fellow major Royal Dutch Shell.

However, the two companies argue they make very little money from their petrol stations. And in 2007 Shell paid global taxes of 18.7 billion US dollars (9.4bn), of which 968 million US dollars (485m) went into Treasury coffers.

Today's figures came in below City expectations for a second quarter figure of around 8.3 billion US dollars (4.2bn).

As with BP, Shell posted a sharp rise in exploration and production profits – from 3.1 billion US dollars in last year's second quarter to 5.88 billion US dollars (2.97bn) this time.

Shell said the improvement reflected improved gas production volumes and the benefit of higher prices, with light sweet crude trading at more than 140 US dollars a barrel by the end of the period.

But pressure on refinery margins meant Shell's oil products division saw second quarter profits fall to 1.07 billion US dollars (540.4m) from 2.94 billion US dollars in 2007.

Royal Dutch Shell chief executive Jeroen van der Veer said: "This is another set of competitive earnings for Shell shareholders. Good operating performance, combined with increased oil and gas prices, offset the impact of weaker downstream conditions in the second quarter 2008.

"Shell is making substantial, targeted investments to grow the company for shareholders and help ensure that energy markets remain well supplied."