Profit tops forecasts; company holds capital spending outlook
By Steve Goldstein, MarketWatch
Last Update: 3:32 AM ET Jul 27, 2006
LONDON (MarketWatch) – Royal Dutch Shell on Thursday said its second-quarter profit rose 40% on surging oil and gas prices despite not producing as much as oil as last year.
Royal Dutch said its net income rose to $7.32 billion, with revenue up 1% to 83.12 billion. It lifted its dividend by 9% to 0.25 euros (32 cents) a share.
On a cost of current supplies measure, a more widely-tracked figure that strips out the change of energy prices on inventories, profit rose 36% to $6.31 billion.
Analysts were looking for a profit of $6.13 billion.
The only European oil company bigger than Shell, BP, earlier this week reported an adjusted profit of $6.12 billion. Read story on BP’s earnings.
Shell shares improved 2.1% in early London trading.
Shell said its profit was driven by a 33% improvement in oil and gas prices, which offset an 8% decline in production to 3.25 million barrels of oil equivalent a day.
The production decline came as violence in Nigeria limited production there, and as the company recovered from last year’s hurricanes in the Gulf of Mexico.
Shell said excluding those factors, and the increased share of production taken by governments due to better prices, production was flat.
It said it can’t predict when it will re-start Nigerian production or when it will ramp up to full capacity.
Shell also noted that it’s set aside $500 million to settle a class-action lawsuit related to its proved reserve reduction in 2004, when it slashed reserves by a third.
Shell provided some comfort to investors by noting it’s holding onto its guidance for 2006 capital spending of around $19 billion and 2007 capital spending of $21 billion, excluding costs of getting the minority-held Sakhalin venture in Russia started.
The industry broadly has been battling cost inflation.
It said it’s still studying whether to create one of the largest U.S. refineries in Port Arthur and whether to expand its Athabasca oil sands project in Canada, and has decided to go ahead on expanding petrochemicals activity in Singapore and the Pearl GTL Qatar gas-to-liquids project.
Steve Goldstein is MarketWatch’s London bureau chief.
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
