November 24, 2020

Exxon and Shell Post Strong Profits

HOUSTON — Exxon Mobil and Royal Dutch Shell reported strong second-quarter earnings on Thursday, taking advantage of higher oil and gasoline prices while investing heavily in new energy projects.

Exxon’s earnings were a bit lower than analysts had expected, despite strong revenue growth, reflecting a record $10.3 billion in capital and exploration expenditures in new oil and gas projects, up 58 percent from the second quarter of 2010. Its stock fell $1.25 a share in early trading to $82.06.

It was the strongest quarter for Exxon since it set a corporate quarterly earnings record of $14.8 billion in 2008, when crude oil prices approached $150 a barrel before collapsing as the world economy slowed.

The strong profits reported by the largest oil companies of the United States and Europe followed the strong results posted by ConocoPhillips and a number of other independent oil companies and oil service companies in recent days.

The industry is investing heavily in the United States in oil and gas projects in shale fields, gradually shifting to oil because of the high price of crude and lagging price of gas. Oil prices rose more than 30 percent during the quarter, mainly because of political disruptions in North Africa and the Middle East, while natural gas prices rose less than 1 percent.

But even with low gas prices, Exxon, Shell and other energy companies are continuing to buy prospective fields in the United States, Europe, Argentina and elsewhere, and overall gas production is still rising after a decade of strong increases in output.

Shell started two projects in the first half of the year in Qatar and expanded its Canadian oil sands operation. The Qatargas 4 liquified natural gas project is now at full capacity and the new Pearl gas-to-liquids operation has started producing, Shell said. The projects are expected to contribute more than 400,000 barrels of oil equivalent per day in peak production, the company said.

“We have made important progress with new production in 2011, and the ramp-up of our new projects should drive our financial performance in the coming quarters,” said the Shell chief executive, Peter Voser, in a statement.

Oil and gas production at Shell dropped slightly because of its sale of a stake in a deepwater Brazilian project earlier this month. This year, it has sold assets in Britain, Canada and the United States. It completed a sale of a group of gas fields in South Texas to Occidental Petroleum for $1.8 billion in January.

Exxon reported earnings of $10.7 billion for the quarter, up from $7.56 billion and revenue of $125.49 billion, up from $92.47 billion. Shell profit rose to $8.7 billion from $4.4 billion.

Julie Werdigier reported from London.

Article source: http://feeds.nytimes.com/click.phdo?i=011c6a620632986f21be5a07ce7ac94f

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