Soaring oil boosts Shell profit

Soaring crude prices are boosting oil companies' profits

Oil giant Royal Dutch Shell has reported a 36% jump in profits on the back of soaring world crude prices.

The Anglo-Dutch firm said net profits measured by current cost of supply for the three months to 30 June were $6.3bn (£3.4bn; 4.9bn euros).

The hefty rise, equivalent to earnings of about $3m an hour, came as world oil prices topped $78 a barrel.

But Shell said its profits had been hit by unrest in Nigeria, where militants have been targeting oil installations.

The company said it was also continuing to deal with the aftermath of last year's devastating hurricane season in the Gulf of Mexico.

'Cost pressures'

In announcing its latest results, Shell reduced its 2006 output target, as security issues in Nigeria continued to affect production levels.

Chief executive Jeroen van der Veer said the industry was experiencing "significant cost pressures".

Analysts also warned that Shell faced key challenges ahead.

"The headline profit figure has come in above forecast, thanks largely to record oil prices," said Keith Bowman, of Hargreaves Lansdown Stockbrokers.

"However, the underlying story is of a company under pressure on many fronts, [with] rising production costs, increased government taxes and security issues in its key African production nation, Nigeria."