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Shell follows BP in announcing huge profits

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Published Date: 30 October 2008
OIL giant Royal Dutch Shell today joined the profits bonanza from record prices with a 71% jump in third-quarter earnings.
'A windfall tax? Don't hold here breath' - read The Scotsman's Deputy Business Editor's blog on Shell's profit announcement

The firm made a mamm
oth 10.9 billion US dollars (£6.6 billion) between July and September – a period when oil prices hit a peak above 147 dollars a barrel.

The news, which is likely to spark fresh calls for a windfall tax, comes two days after rival BP posted its biggest-ever quarterly profits of £6.4 billion.

Royal Dutch Shell posted the huge profits – a quarterly record and equivalent to nearly £72 million a day – despite a 1% fall in production compared to last year.

This was due to factors such as the impact of hurricane damage in the Gulf of Mexico, which hit refining availability, as well as maintenance work in the North Sea.

Oil prices have since fallen back to less than half their mid-July peak to trade at around 70 dollars a barrel, as global demand fears mount.

Chief executive Jeroen van der Veer – who called the results "satisfactory" – said the company was "robust across a wide range of oil prices".

"We are watching the world economic situation closely," he added.
Even stripping out more than 2.8 billion US dollars (£1.7 billion) of exceptional gains from disposals and revalued oil and gas contracts,
Shell's "clean" profits of 8 billion US dollars (£4.8 billion) were well ahead of City forecasts of 7.2 billion US dollars (£4.3 billion).



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  • Last Updated: 30 October 2008 1:00 PM
  • Source: The Scotsman
  • Location: Edinburgh
  • Related Topics: Shell Oil
 
1

Kate,

Zurich 30/10/2008 10:30:31
And a lot of that will be from the Shell-run Stracathro service station, which yesterday was still charging £1.26 a litre while competitor petrol stations in Brechin and Montrose were charging 94p a litre...
2

Bemused and above it all,

30/10/2008 11:07:15
If were lucky the oil companies might give us a cuddle and peck on the cheek when their done!
3

Crivvens,

30/10/2008 11:12:35
Time to get on your bike and save on petrol costs; Russell Brand knows of a good 'bike'though its going to be expensive for him.
4

Alternative (High-Octane) Fuel Head,

Edinburgh 30/10/2008 11:14:30
Before anyone starts, the high fuel prices in this country are due to GOVERNMENT TAXES, not oil company profiteering.

Don't hit out at the oil companies, hit out at this incompetant bunch of fools we call a government.
5

Crivvens,

30/10/2008 11:23:12
I still see the same amount of gas guzzlers on the roads and roads choked up cars on the school run. It cant be expensive enough yet.
6

The Federalist (the poster formerly know as NAUON),

30/10/2008 11:42:02
#4 An easy scapegoat - if we had lower taxes the thieving oil and gas companies would still be raking it in.
7

John south of Soutra,

30/10/2008 12:42:13
Come on #4 - yes the high taxes are responsible for the price but they ahve also been profiteering, how else do you explain 71% increase in year on year profits. I really had to laugh at the CEO statement that this was satisfactoy, business's are looking to safeguard their sales & profit levels and he claims that 71% increase in profit is only satisfactory - Priceless
8

Active Sassenach,

Luton, England 30/10/2008 14:12:05
We all need to keep our shoes on and get a good grip on the ground. The largest component of fuel prices on the forecourt is tax. I suspect that the largest component of upstream BP and Shell profits is the fluctuating value of "crops in the ground".

We have been here before. We had a major scandal over the valuation of "crops in the ground" that caused one oil major (never mind which one as that is not the relevant point) to make epic prior year adjustments. Downstream operations are inherently less profitable for oil companies and upstream results are subject to high volatility because of the geo-political influences on oil prices which oil companies cannot control.

With all due respect to fuel users under severe econonomic pressure, we should not have a so-called "windfall tax". Like any other tax it creates a totally unproductive industry in legal avoidance, especially in a global multi-currency financial environment with no exchange controls. It will yield less than hoped and cost more than expected to collect.

Nonetheless, in the short term, the economy needs all the help it can get. We should allow the oil companies a robust reserve for fluctuation against the value of "crops in the ground" and then assess their economics. Subject to that, we should ask them to put 1,000 vacancies in the Jobcentre by 31 March 2009 either of their own or subsidising someone else's - eg in the renewable energy sector. We should review them again in April 2009 and, if their relative financial position remains the same, ask them to put another 1,000 vacancies in the Jobcentre.

 

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