Shell puts rival BP in the shade after profits jump
SHELL put arch rival BP in the shade after it rode out oil-price "volatility" and turned to US corporate veteran Chad Holliday to be its new chairman.
The FTSE 100 oil giant posted third-quarter profits of $5.8 billion (£3.6 billion), a 31 per cent jump on last year when the group was dragged down badly by spiralling costs which have since brought under better control.
Although Shell beat City hopes, profits were down on the $6.1 billion seen in the April-June quarter due to the plunging oil price, which has plummeted by more than 20 per cent since the summer.
Oil and gas prices have continued to fall since the end of the quarter, threatening further revenue falls for Shell and its competitors.
These concerns sent Shell's share price down by 11.5p to 2224p today. BP's profit dropped 19 per cent to $3 billion this week, as its Russian joint venture was hit by a tumbling rouble.
Shell chief executive Ben van Beurden said: "The recent decline in oil prices is part of the volatility in our industry. It underlines the importance of our drive to get a tighter grip on performance management, keep a tight hold on costs and spending, and improve the balance between growth and returns."
Shell has been reducing its investment, selling assets and cutting costs this year. Oil and gas production for the third quarter was 2.79m barrels of oil equivalent a day, down 5 per cent year on year. But stripping out the impact of disposals, Shell said underlying production was up 2 per cent.
The firm raised its dividend by 4 per cent to 47cents a share.
Holliday will replace Jorma Ollila, who steps down in 2015 after nine years in the role. Holliday, who joined Shell's board in 2010, was DuPont chief executive from 1998 to 2009 and chairman from 1999 to 2009. He is a director of Bank of America and was chairman until last month.
Charles Stanley analyst Tony Shepard expects oil prices to remain depressed throughout next year but added: "Shell's production profile has improved which should be more robust to the new operating environment. In addition, Shell's balance sheet is strong and it has a self-help programme underway."