Shell's Earnings Almost Triple on Fuel Prices
Royal Dutch/Shell Group, Europe's second-biggest oil company, said fourth-quarter profit almost tripled because of surging oil and gas prices. The company cut its reserves for the fifth time in 13 months.
Net income rose to US$5.13 billion from US$1.69 billion a year earlier, Shell said on Wednesday in a statement, based on accounting that strips out gains from holding oil inventories. Earnings of US$4.9 billion were expected, according to the median forecast of 12 analysts surveyed by Bloomberg News. Its reserves for the year ending in 2003 were reduced by 1.4 billion barrels.
Chief Executive Jeroen van der Veer ended a probe that had already reduced oil reserves by 26 per cent. Shell said on October 28 it might have to eliminate another 900 million barrels, or 6.3 per cent, from its books. The restatements led to the departure of three senior executives, more than a dozen shareholder lawsuits and US and UK regulatory fines totalling US$151.5 million.
Shell said its reserves at the end of 2003 were 12.95 billion barrels and the review of its holdings is complete for 2003. The company indicated reserves will fall again in 2004, because it replaced only 45 per cent to 55 per cent of production.
Royal Dutch/Shell three months ago announced plans to combine the boards and shares of its parent companies in the United Kingdom and the Netherlands, ending almost a century of dual ownership. The restructuring is prompting some funds to buy the shares because they need to track index changes.
Shares in Shell Transport closed at 481 pence in London on Wednesday, the highest since July 2002.
Van der Veer will run the combined company, to be called Royal Dutch Shell Plc. He was paid 1.12 million euros (US$1.46 million) in 2003, according to Shell's annual report.
(Chinadaily Feb. 2005)