Big earnings from Big oil today:
Shell, BP Post Record Profit on $100 Oil; Shares Jump (Update1)
By Fred Pals and Eduard Gismatullin
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April 29 (Bloomberg) -- Royal Dutch Shell Plc and BP Plc, Europe's two largest oil companies, reported record profit after crude surged above $100 a barrel and natural gas prices rose.
Shell had its biggest gain in London trading in almost three years after saying in a statement today that first-quarter net income jumped 25 percent to $9.08 billion. BP rose the most in 5 1/2 years as profit soared 63 percent to $7.62 billion. Excluding changes from holding inventories and one-time items, both companies beat analysts' estimates.
Oil reached $111.80 a barrel in March as a tumbling dollar spurred investors to buy commodities, while natural gas increased by an average 22 percent. Output rose at Shell and BP, helping to counter falling margins from refining. Crude touched a record $119.93 yesterday in New York.
``What a great set of results,'' said Jason Kenney, an Edinburgh-based analyst at ING Wholesale Banking. ``The numbers are strong on the operational side.'' Kenney has a ``hold'' recommendation for BP and Shell.
Excluding changes from holding inventories and one-time items, Shell's profit was $7.85 billion, beating the $6.88 billion median estimate of eight analysts surveyed by Bloomberg. BP's profit on the same basis advanced to $6.49 billion, above the eight-analyst median estimate of $5.26 billion.
Shell A shares in London climbed as much as 6 percent to 2,057 pence, trading at 2,054 pence at 11:06 a.m. local time. BP rose as much as 5.8 percent to 612 pence in London trading and was at 611 pence as of 11:07 a.m.
The gain for Shell was the biggest since July 2005 and for BP, since October 2002.
Exxon, Chevron
ConocoPhillips, the third-largest U.S. oil company, said April 24 that first-quarter profit rose 17 percent to $4.14 billion as crude and gas prices gained. Exxon Mobil Corp., the world's biggest oil company, reports earnings on May 1, with U.S. No. 2 Chevron Corp. a day later.
Shell Chief Executive Officer Jeroen van der Veer, 60 and scheduled to retire on June 30, 2009, relied on increasing natural gas production to make up for slumping crude output.
The Hague-based company said today that total stopped Shell production in Nigeria is 164,000 barrels a day. Overall production increased to more than 3.52 million barrels of oil equivalent a day, above the 3.37 million estimated by analysts. Gas output gained 9 percent in the period, with oil production down 6 percent.
Shell's net investment this year will be between $26 billion and $27 billion, Chief Financial Officer Peter Voser said today on a conference call. It is designed to add 1 million barrels a day of production and 300,000 barrels a day of downstream capacity, he said.
New Production
BP CEO Tony Hayward, 50, who replaced John Browne a year ago, is bringing new production and refining capacity on line to boost earnings. The London-based company expects its Thunder Horse platform in the Gulf of Mexico to start later in 2008 after a three-year delay. The facility is designed to pump 250,000 barrels of oil and 200 million standard cubic feet of gas per day.
The company said April 22 that it began oil production at the Deep Water Gunashli field in the Azerbaijan section of the Caspian Sea. Production there is expected to reach 320,000 barrels a day.
BP said refinery availability rose to 88 percent in the first quarter from 81.6 percent a year earlier after repairs at the Whiting, Indiana, plant and the Texas City refinery, damaged by a fatal explosion and hurricane in 2005, returned units to service.
Refinery processing fell in the period, mostly because of maintenance at BP's Carson, California, facility.
Profit from turning crude into fuels such as gasoline and diesel fell to $4.57 a barrel in the first quarter from $9.41 a year earlier, according to BP data.
((Shell will hold a Webcast presentation, starting at 14:00 p.m. London time. To register and listen go to shell.com. BP will hold a Webcast presentation at 3:15 p.m. London time. To register and listen, go to bp.com
To contact the reporters on this story: Fred Pals in Amsterdam at fpals@bloomberg.net; Eduard Gismatullin in London at egismatullin@bloomberg.net
Last Updated: April 29, 2008 06:14 EDT |
