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Last Updated: Thursday, 27 October 2005, 09:04 GMT 10:04 UK
Shell buoyed by oil price surge
Shell petrol station
Shell is performing well despite the hurricanes
Profits at oil giant Shell have surged as the recent rise in oil prices more than offset the cost of US hurricanes.

Current cost of supply (CCS) earnings rose to $7.37bn (4.01bn) in the three months to 30 September.

That was up 68% compared with the same time last year, though when one-off gains from the sale of assets were excluded it fell $1.57bn to $5.8bn.

The recent hurricanes in the US had hit production at several refineries, but most were now back on line, Shell said.

The company said that the cost of repairing damage to rigs and refineries following the US hurricanes would be about $350m, although most of this would be covered by insurance.

Hurricane effect

Most of Shell's fields in the storm-ravaged Gulf of Mexico had reopened or were close to starting up again, but its damaged Mars platform would not be back on stream until the second half of 2006, the company said.

Our operational performance is paying off with good results
Jeroen van der Veer
Chief executive, Shell

Hurricanes Katrina and Rita pushed production down by 4.9m barrels in the third quarter of the year. Shell added it also expected 4.5m barrels to be lost in the current fourth quarter.

However, the subsequent rise in oil prices to record levels above $70 a barrel helped to outweigh the cost of lost production.

But despite the rise feeding through to petrol pump prices, Shell said the surge had not increased profits at its petrol stations as margins at its sites in Europe and Asia fell.

"Our operational performance is paying off with good results," Shell chief executive Jeroen van der Veer said in a statement.

Sales boost

During the three month period Shell raised $1.77bn from the sale of its stake in Dutch gas distributor Gasunie and other transactions.

The extra income helped the group to hit its target of selling off between $12bn and $15bn worth of assets this year earlier than expected, with sales between 2004 and 2006 raising $13.7bn.

Looking ahead, Shell said it would plough on with plans to return $5bn to shareholders, including remaining Royal Dutch stocks, by the end of the year.

Shell's profits for the third quarter beat figures released for the same period by UK rival BP last week.

BP reported third quarter profits rose 16% on the year to $4.4bn. However, the figure was slightly down on the previous three months as a result of Hurricanes Katrina and Rita.

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