Financial News

  • 3 February 2012, 14:02

Oil Firm Shell's Profits Double To 18bn

Royal Dutch Shell has reported a profits of 18.1bn ($28.6bn) for 2011, a jump of 54% on a year ago.

The improvement for the Anglo-Dutch company came as high oil prices outweighed poor margins in its refining business and despite a 3% decline in production.

Its performance in the final quarter of last year was also worse than expected, with trading impacted by a squeeze on refining margins and lower natural gas prices.

But the oil firm still made profits of 4.1bn ($6.5bn) in the fourth quarter, which represented a 13% rise on a year ago.

Royal Dutch Shell chief executive officer Peter Voser said: "Our fourth quarter results were impacted by a sharp downturn in industry refining margins and North American natural gas prices.

"The global economy and energy markets are likely to see continued high volatility. Despite the near-term uncertainties, Shell's focus remains on through-cycle investment for sustainable growth."

Shell has outshone its troubled rival BP in recent years and underlined its confidence by promising dividend growth for the first time since 2009.

It said its three-year strategic plan, beginning in 2010, had built the foundations for growth through a company-wide restructuring and by refocusing its efforts on emerging growth markets.

The company is planning investment in major projects worth 19bn in 2012 and said its outlook was boosted by more than 60 new projects and options.

There will also be 3.8bn of investment in Shell's 'heartlands' during this year, including extending the life of its UK operations in the North Sea.

Mr Voser added: "Shell's strategy is innovative and competitive. Our improving financial position creates an opportunity to increase both our dividends and investment levels."

His comments came a month after Shell angered unions when it scrapped its final salary pension scheme for new recruits, meaning not a single employer in the FTSE 100 Index now offers the retirement package.