http://english.aljazeera.net/NR/exeres/729B0B17-8C04-4249-B69B-FADF394A4DC3..htm
Rising prices boost oil profits
*A global increase in oil and gas prices has contributed to the profit margin
of oil majors [EPA]
British Petroleum (BP) and Royal Dutch Shell, two of the largest international
oil majors, have announced a boost in first quarter profits, reflecting on
increased oil and gas prices.
BP reported a 63 per cent rise in profits on Tuesday for the first quarter of
this year, while Royal Dutch Shell announced a 25 per cent rise in earnings
over the same period.
BP the London based oil major, reported a profit of $7.6bn compared to $4.4bn
in the first-quarter of 2007.
It beat forecasts on Tuesday with a 48 per cent replacement cost (RC) net
income, helped by record global oil prices and strong profits from energy
markets.
'Trading in favour'
BP reported its RC at $6.49bn, a value which is often viewed as the most
important parameter of an oil company's performance.
It excluded changes in the value of crude inventories and measured only the
amount that would cost to replace assets at current prices.
BP said production averaged 3.913 million barrels of oil equivalent per day in
the first three months of the year, in line with forecasts.
According to the company, the total output would have risen 5 per cent, had it
not been for the production sharing contracts it has with resource-holders.
The contracts reduced the amount of oil BP received from projects when oil
prices increased.
BP announced a profit in the first quarter, despite lower crude processing
margins and throughputs at its refineries.
However, a BP spokesman said that the strong first-quarter earnings did not
necessarily represent BP's return to form.
"All the trading activity has gone in our favour in this quarter. This has
probably contributed $400m above a typical result," the spokesman said.
The spokesman added that a deferral of tax charges in Russia boosted the bottom
line by around $200m, while corporate overheads that dipped by $250m this year,
added to the profit.
'Operating performance'
Meanwhile, Hague-based Royal Dutch Shell also declared a 25 per cent rise in
its first-quarter earnings on Tuesday.
Shell, Europe's largest oil company, attributed the first-quarter performance
to strong increases in energy prices.
The company said its average selling price of crude oil leaped by 66 per cent
to more than $90 per barrel from the first quarter a year ago.
This led to profits soaring to a record $9.08bn, up from $7.28 bn recorded last
year.
Total sales were up 55 per cent to $114 bn.
The company said production averaged 3.52 million barrels of oil equivalent per
day in the first three months of the year, compared with 3.51 million in the
same period last year.
Jeroen van der Veer, chief executive of Shell, said that the strong numbers
were due to "good operating performance, coupled with increased oil and gas
prices".
Jason Kenney, an analyst, said: "They look like blow-away numbers. Surprising
across all divisions at this time."
"I can't see anything in particular that is unusual, they've just done well,"
Kenney said.
Shell and other oil companies are benefiting from surging oil prices, which
topped $100 a barrel in January and have since climbed towards $120.
____________________________________________________________________________________
Be a better friend, newshound, and
know-it-all with Yahoo! Mobile. Try it now.
http://mobile.yahoo.com/;_ylt=Ahu06i62sR8HDtDypao8Wcj9tAcJ
[Non-text portions of this message have been removed]
