Shell Profits Surge despite Cut in Production
Harrison, Michael, The Independent (London, England)
Royal Dutch/Shell reported record first-quarter profits yesterday of $5.5bn (pounds 2.9bn) despite a sharp fall in oil production as output declined from some of its ageing fields.
The 29 per cent increase comfortably outstripped analysts' forecasts and came on the back of surging oil prices and higher refining margins. But in an effort to limit criticism of its record profits at a time of soaring petrol prices, Shell said its UK retail business had made a loss in the three-month period.
The increase in profits enabled Shell to reward investors with a $2bn dividend payment and a $500m share buy-back programme. Over the course of this year, the company expects to return a total of between $13bn and $15bn to investors.
Shell sought to deflect criticisms that it should be ploughing more of its surplus cash into exploration to improve its battered reserves ratio. Last year the company cut its proved reserves by a quarter and replaced only 19 per cent of the oil it pumped using the US Securities and Exchange Commission's strict criteria.
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Publication information: Article title: Shell Profits Surge despite Cut in Production. Contributors: Harrison, Michael - Author. Newspaper title: The Independent (London, England). Publication date: April 29, 2005. Page number: 59. © 2009 The Independent - London. Provided by ProQuest LLC. All Rights Reserved.