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The New York Times: Shell's Profit Declines After Storm Damage

Published: February 3, 2006
Royal Dutch/Shell said yesterday that its profit in the fourth quarter fell more than 4 percent from the quarter a year earlier as hurricane damage left it unable to take advantage of near-record crude oil prices.
Net income declined to $4.4 billion, or 66 cents a share, from $4.6 billion, or 68 cents a share, in 2004. Revenue, excluding sales taxes and excise duties, slipped 1 percent, to $75.5 billion. Profit for all of 2005 was $25.3 billion, a record for the company.
Shell said that it would buy back about $5 billion of its shares this year, half the level expected by some analysts.
The company, whose increase in production has lagged behind rivals including Exxon Mobil, is the first major oil concern to report a drop in earnings as oil trades above $60 a barrel. It plans to spend $19 billion this year to help rebuild reserves.
Production in the fourth quarter fell nearly 9 percent, to the equivalent of about 3.5 million barrels of oil a day, compared with 3.84 million a year earlier, Shell said. The company reaffirmed that for 2006 it expected to produce in the “lower half” of a range of 3.5 million to 3.8 million barrels a day.
Of oil companies that drill in the Gulf of Mexico region, Shell was among those that suffered the most damage. It has said that it expects a major installation, the Mars platform, to resume operations in the second half of 2006.
In London yesterday, the Class B shares of Royal Dutch/Shell fell 2.4 percent.

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