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Last Updated: Thursday, 1 February 2007, 18:08 GMT
Shell reports record $25bn profit
Shell petrol station
Oil firms have enjoyed bumper profits as prices have soared
Oil giant Royal Dutch Shell has reported record annual profits of $25.36bn (12.94bn) for 2006.

Strong operations in the US and growth in deep water gas production off Nigeria helped boost the fortunes of Europe's biggest oil company.

Shell's surging annual earnings meant the Anglo-Dutch giant generated earnings of almost 1.5m an hour.

However, analysts warned that the current year could be tougher for Shell following a fall in the price of oil.

The company added that it was continuing to deal with "major security related concerns" in Nigeria's Delta oil producing region, where attacks on pipelines have knocked production.

Oil production in the troubled region was down 191,000 barrels on the previous year.

The company also saw the loss of key interests in its Russian Sakhalin-2 oil and gas project to Russian energy giant Gazprom, following intense political pressure from the Kremlin.

Exploration strategy

We saw good operational and financial performance in Shell - our exploration strategy is paying off
Jeroen van der Veer, Shell chief executive

Shell said output during the final quarter reached 3.645 million barrels of oil equivalent a day, compared with 3.5 million a year ago.

"In 2006, we saw good operational and financial performance in Shell. Our exploration strategy is paying off, " said chief executive Jeroen van der Veer.

"Hydrocarbon production was underpinned by the production re-start from the Mars platform in the USA, growth in LNG and deep water Nigeria."

Mr van der Veer added: "We have agreed to partner with Gazprom in Sakhalin-2, and are progressing with the proposal to acquire the minority shareholding in Shell Canada".

In trading in London, Shell's dual-listed A and B class shares both closed up nearly 2%.




VIDEO AND AUDIO NEWS
Analysis of Shell's profits announcement



SEE ALSO
Gazprom grabs Sakhalin gas stake
21 Dec 06 |  Business
Oil prices up on Nigerian attacks
26 Oct 06 |  Business
Shell counters Sakhalin concerns
16 Oct 06 |  Business
New deadline for Sakhalin project
26 Sep 06 |  Business
Russia's Sakhalin stance queried
25 Sep 06 |  Business
Shell faces more Russian pressure
18 Sep 06 |  Business
Sakhalin residents call for Shell cash
27 Oct 05 |  Asia-Pacific

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