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The Times: Taxman benefits as Shell's profit soars 30% to $22.9bn

Feb 3rd, 2006
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By Carl Mortished, International Business Editor
RECORD profits at Royal Dutch Shell last year yielded an extraordinary harvest for the Inland Revenue which collected $1.2 billion (£674 million) from the oil giant, double the amount Shell paid in UK taxes in 2004.
Soaring oil and gas prices pushed Shell’s current cost profit up 30 per cent to $22.9 billion but investors were disappointed by a 3 per cent gain in profit to $5.4 billion in the final quarter.
Lingering doubts over Shell’s ability to replace the oil and gas it produces with new reserves and disappointment that the oil company did not match ExxonMobil’s strong fourth quarter gain pushed Royal Dutch Shell “B” stock down 2.4 per cent to £19.56 per share.
Jeroen Van der Veer, chief executive, said that the company had a good year, meeting its investment and production targets. The oil giant spent $15 billion on new projects and plans to raise that to $19 billion this year. But output slipped in the fourth quarter from more than 3.8 million barrels per day (bpd)in 2004 to 3.5 million bpd, partly due to loss of production caused by damage to offshore platforms during last year’s violent hurricanes in the Gulf of Mexico.
Mr Van der Veer said that Shell was continuing to target an increase in output to between 4.5 million and 5 million bpd over the next decade. The group found some two billion new barrels of hydrocarbons last year but is only booking between 750 million and 850 million to its formal statement of reserves.
Soaring oil prices boosted Shell’s cash flow from $28 billion to $35 billion but it disappointed some investors by failing to boost its share buyback programme. Shell bought in for cancellation some $5 billion in stock in 2005 and paid out $10.7 billion in dividends.

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