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Thursday, 2 November, 2000, 12:20 GMT
Shell posts record profits
A Shell tanker arrives at a petrol station
Oil companies claim to make very small profits from petrol retailing
The Anglo-Dutch oil giant Royal Dutch/Shell Group has reported record third-quarter profits of $3.254bn (2.24bn), up 80% from the corresponding period last year.

Shell's earnings announcement follows those of the four largest US oil companies who a week ago reported net income up 80-135%, helped by the highest prices for crude oil and refined products for 10 years.
Royal Dutch/Shell chairman Mark Moody-Stuart
Moody-Stuart: "leaner periods for Shell in the future"

Exxon Mobil's $4.29bn profits result was described by one analyst as "the most profitable quarter ever by any public company" and helped lead to renewed calls among UK activists for lower fuel prices.

Campaigners on Thursday described Shell's profits as "scandalous" but said fuel taxes levied by the government would remain the focus of their protests.

Reduced petrol profits

The oil companies argue that only a very small proportion of their total profits, about 3% according to Shell, is derived from petrol (gasoline) sales.

Shell attributed its performance to higher crude oil and natural gas prices, improved refining margins and cost improvements.

Brent crude oil prices averaged $30.45 a barrel in the quarter, up from $20.60 a barrel last time, it said.

Shell: the third-quarter earnings
Exploration & production, $2.313bn
Downstream gas & power, $0.152bn
Oil products, $0.642bn
Chemicals, $0.175bn
Other, -$0.035bn
Corporate, $0.007bn
Total, $3.254bn
It said marketing and retailing margins - the profits it makes from selling petrol - and chemicals margins were reduced.

In a statement, chairman Mark Moody-Stuart was keen to distance Shell from the tense atmosphere in the UK surrounding fuel prices.

He said the company could not influence oil prices or fuel duties and suggested that a series of agreements to lift output by the Organisation of Petroleum Exporting Countries (Opec) could affect Shell in the future.

"I have no doubt there will be leaner periods in the future just as there were in the past. After all it is less than two years ago that Brent crude fetched $10 a barrel.

"If further production increases implemented by these [Opec] countries in October are sustained, oil stocks can be expected to build once the winter demand has passed, so causing downward pressure on crude prices next year."

Shares fall

Shell's results - although a record - were at the lower end of analyst expectations and sent the company's shares down 3.2%.

Shell stock had climbed nine pence, or 1.6%, to 571p in early trading on the London Stock Exchange but slipped back to 544p by 1217 GMT, down 18p, or 3.2%, on the day.

In the Netherlands, Royal Dutch shares were down 3.6% by late morning at 67.99 euros.

The UK's other global oil industry player, BP, is due to report third quarter earnings next Tuesday.

Analysts are predicting another record breaking performance, with profits of $3.575bn-3.865bn expected, up from $1.95bn last time.

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See also:

02 Nov 00 | UK Politics
Straw outlines blockade battle plan
02 Nov 00 | UK Politics
Fuel protesters attack 'profiteering'
30 Oct 00 | Business
Oil steady as Opec lifts output
24 Oct 00 | Business
Profits surge at oil companies
16 Oct 00 | Business
Oil giant Chevron buys rival Texaco
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