Oil major Shell has disappointed the City despite racking up profits of more than $27 billion (£17.1bn) for 2012.
The latest haul, which continues to reflect the strength of global oil prices, was 6 per cent lower than a year ago after a weaker-than-expected performance from its production arm in the final quarter of the year.
Chief executive Peter Voser said the company faced a year of headwinds in 2012 but its strategy was one “others can’t easily repeat”.
Shell’s refining operations returned to profit in the quarter, but analysts were more concerned about a 14 per cent fall in earnings from its upstream division to $4.38bn. Shell blamed the quarterly decline on higher costs and exploration expenses.
Production increased by 3.3 per cent to 3.41 million barrels a day, reflecting the impact of start-ups in Australia and Qatar against declines at existing fields.The refining arm made profits of $1.2bn, compared with a loss of $278 million last year.
Shell has around 30 projects under construction in a bid to develop leadership positions in the areas where it chooses to invest.
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said the figures failed to inspire the market.
He added: “There are certainly positives within the statement. Refining margins improved in the last quarter, the company’s increased investment is part of a long-term strategy, and the accompanying management comments were upbeat on future prospects.
“However, the overall profit number was shy of expectations, costs are on an upward trend within the industry and the weakness of the gas price has impacted on Shell, which for the first time sold more gas than oil last year.”