Shell plans to invest $36bn
By Amanda Vermeulen
Published: August 1 2008 03:00 | Last updated: August 1 2008 03:00
Surging oil prices helped Royal Dutch Shell record another quarter of bumper profits in the three months to June, even as production of oil and gas remained flat.
The company yesterday unveiled the largest expenditure programme in its history, saying it would spend $36bn (£18.2bn) in 2008 compared with $25bn last year, as it seeks new sources of oil and gas to boost reserves and production and to exploit existing resources better.
Using current cost of supplies (CCS), which adjusts for changes in inventory values, Shell reported earnings of $7.9bn (£3.9bn), 5 per cent higher than the same period last year.
On a “clean” CCS basis – after an adjustment to reflect commodity price effects – second-quarter earnings were $8.6bn, 24 per cent higher than the same quarter of 2007.
For the first six months, CCS earnings were 8 per cent higher than the same period last year at $15.7bn.
Oil and gas production in the second quarter, including oil sands, was 3.126m barrels of oil equivalent a day, compared with 3.178m last year. Excluding divestments and pricing effects, it was flat. Shell suffered from a significantly weaker performance in its downstream business, with pressure on refining margins.
The extra capital spending will pay for commitments on pending deals, inflation costs and spending on oil and gas projects that offer fast returns. A large portion will be soaked up by Shell’s C$5.9bn (£2.9bn) bid for Duvernay Oil of Canada.
Jeroen van der Veer, chief executive, said Shell would only invest in regions that were reasonably secure. It has been one of the biggest casualties of rebel attacks on producers in Nigeria.
The interim dividend is raised to 40 cents (36 cents) and the shares fell 23p to close at £17.82.
* FT Comment
Shell faces similar problems to its peers, how best to secure resources. The surprise extra investment is intended to help address this and as long as the oil price remains high cash should be easy to come by. Shell has prospered at BP’s expense in recent years as a result of the latter’s travails in the US, but while the two have forward price-earnings ratios which are roughly in line, according to Cazenove, BP may offer other attractions, not least a chunkier dividend yield and better cover.
Copyright The Financial Times Limited 2008
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.
