Shell follows BP in announcing huge profits

Published on Thursday 30 October 2008 09:19

OIL giant Royal Dutch Shell today joined the profits bonanza from record prices with a 71% jump in third-quarter earnings.

'A windfall tax? Don't hold here breath' - read The Scotsman's Deputy Business Editor's blog on Shell's profit announcement

The firm made a mammoth 10.9 billion US dollars (6.6 billion) between July and September – a period when oil prices hit a peak above 147 dollars a barrel.

The news, which is likely to spark fresh calls for a windfall tax, comes two days after rival BP posted its biggest-ever quarterly profits of 6.4 billion.

Royal Dutch Shell posted the huge profits – a quarterly record and equivalent to nearly 72 million a day – despite a 1% fall in production compared to last year.

This was due to factors such as the impact of hurricane damage in the Gulf of Mexico, which hit refining availability, as well as maintenance work in the North Sea.

Oil prices have since fallen back to less than half their mid-July peak to trade at around 70 dollars a barrel, as global demand fears mount.

Chief executive Jeroen van der Veer – who called the results "satisfactory" – said the company was "robust across a wide range of oil prices".

"We are watching the world economic situation closely," he added.

Even stripping out more than 2.8 billion US dollars (1.7 billion) of exceptional gains from disposals and revalued oil and gas contracts,

Shell's "clean" profits of 8 billion US dollars (4.8 billion) were well ahead of City forecasts of 7.2 billion US dollars (4.3 billion).