December 8, 2023

Royal Dutch Shell Posts $5.6 Billion Profit

The results were 15 percent above the previous year but well below analysts’ expectation of around $6.3 billion.

Stuart Joyner, an analyst at Investec Securities in London, described the results as “a substantial miss.” Shell’s stock price was down about 1 percent in morning trading in London.

The company’s earnings for the year were $25.1 billion, up 2 percent over 2011.

The disappointment was largely due to lower earnings in Shell’s core exploration and production business, mainly because of weak performance in the Americas, where Shell’s multibillion Alaska drilling program has encountered multiple snafus and delays.

Exploration and production earnings were $4.4 billion compared to $5.1 billion the previous year, with the U.S. exploration and production business reporting a $69 million loss, partly due to low natural gas prices.

In another disappointment Shell estimated that it only replaced 44 percent of the reserves of oil and gas that it produced in 2012. That indicated that the company’s exploration effort, despite increased emphasis and spending in recent years, is still not performing well.

The capital investment forecast for 2013 was increased by 10 percent to $33 billion — another worry for the markets, as it suggests that Shell may be having trouble controlling costs.

On the positive side, Shell’s huge Pearl gas-to-liquids plant in Qatar is now fully operational and adding a hefty 235,000 barrels per day of oil equivalent to Shell’s production for the quarter.

Shell said that it was likely to increase its dividend in the first quarter of 2013 to 45 cents a share, a 4.7 percent increase over the first quarter of 2012.

“Shell is competitive and innovative,” the company’s chief executive, Peter Voser, said in a statement. “We are delivering on a strategy that others can’t easily repeat.”

Shell also had cause for relief on Wednesday when a court in The Hague dismissed most aspects of lawsuits brought against it by Nigerian farmers and fishermen seeking damages for pollution from oil spills in the Niger Delta.

Article source:

BP Names Chief of Oil Production Business

Mr. McKay is taking over from BP’s chief executive, Robert W. Dudley, who took over management of the so-called upstream unit in an effort to improve risk management in the wake of the spill. Mr. McKay, who is currently chairman and president of BP America, is to start in his new role at the beginning of next year. He will report to Mr. Dudley.

“During the past two years, we have successfully introduced a more centralized organization to our upstream, BP’s largest organizational change for two decades,” Mr. Dudley said in a statement. “I believe it is now timely and appropriate to appoint a fully dedicated chief executive to this, our largest business.”

The explosion in April 2010 on a drilling platform leased by BP killed 11 workers and created the largest oil spill in U.S. history. After the catastrophe, Andy G. Inglis departed as head of exploration and production and Mr. Dudley moved to impose a more centralized management structure and stricter safety standards.

As head of BP America, Mr. McKay, 53, has been overseeing the oil company’s restoration work on the Gulf of Mexico coast. Mr. McKay, who is already a member of BP’s executive management team, will move to London from Houston for his new post. His successor at the U.S. unit will be announced later, BP said.

Mr. McKay joined BP through the company’s merger with Amoco, where he started his career in 1980. At BP, he previously worked as chief of staff for exploration and production, was responsible for the upstream and downstream, or sale and distribution, businesses in Russia and Kazakhstan, and led talks with BP’s former partners in its Russian joint venture, TNK-BP. He was named chairman and president of BP America in January 2009.

BP plans to start nine major development projects by the end of 2014, according to its Web site, in areas including Angola, the North Sea, the Gulf of Mexico and Azerbaijan.

Article source: