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| Shell hit by falls in oil price | Shell hit by falls in oil price |
| (about 3 hours later) | |
| Oil giant Royal Dutch Shell has posted a sharp fall in quarterly profits after the price of oil slumped dramatically towards the end of last year. | Oil giant Royal Dutch Shell has posted a sharp fall in quarterly profits after the price of oil slumped dramatically towards the end of last year. |
| Profit for the final three months of 2008 fell to $4.8bn (£3.4bn), down 28% from the same period a year ago and 56% lower than the previous quarter. | Profit for the final three months of 2008 fell to $4.8bn (£3.4bn), down 28% from the same period a year ago and 56% lower than the previous quarter. |
| But annual profits at the Anglo-Dutch company rose 14%, to $31.4bn, helped by record oil prices over the summer. | But annual profits at the Anglo-Dutch company rose 14%, to $31.4bn, helped by record oil prices over the summer. |
| This represents a record annual profit for any UK or European company. | This represents a record annual profit for any UK or European company. |
| 'Satisfactory' results | |
| Shell boss Jeroen van der Veer described the fourth quarter results as "satisfactory", given the fall in demand for oil and the weakening global economy. A $50 price will not allow us to invest. If we don't invest now, then we will store up a problem in three years from now when demand picks up Abdalla El Badri, Secretary-General, Opec class="" href="/1/hi/business/davos/7857791.stm">Calls for oil at $60-$80 a barrel | |
| "Our strategy remains to make significant investments in the company for future profitability. Industry conditions remain challenging, and we are continuing the focus on capital and cost discipline at Shell," he said. | "Our strategy remains to make significant investments in the company for future profitability. Industry conditions remain challenging, and we are continuing the focus on capital and cost discipline at Shell," he said. |
| Oil and gas production in the fourth quarter was virtually unchanged from the same period in 2007, at 3.4 million barrels a day. | Oil and gas production in the fourth quarter was virtually unchanged from the same period in 2007, at 3.4 million barrels a day. |
| Full-year production was slightly down on the previous year. | Full-year production was slightly down on the previous year. |
| "These are not top drawer results from Shell," said Keith Bowman at Hargreaves Lansdown. | "These are not top drawer results from Shell," said Keith Bowman at Hargreaves Lansdown. |
| "All in all, despite enviable cash flows and low borrowing levels, Shell, as with industry in general, is suffering under the weight of global economic decline." | "All in all, despite enviable cash flows and low borrowing levels, Shell, as with industry in general, is suffering under the weight of global economic decline." |
| Falling prices | |
| Oil prices hit $147 a barrel in July 2008, but are now below $50. | |
| At the World Economic Forum in Davos, bosses of oil cartel Opec and top energy firms have said the price needs to rise to between $60 and $80 to cover the cost of new oil exploration projects. | |
| "A $50 price will not allow us to invest. If we don't invest now, then we will store up a problem in three years from now when demand picks up," said Opec Secretary-General Abdalla El Badri. | |
| "The price of oil has to be high enough to motivate investment going forward," agreed BP boss Tony Howard. | |
| WEST TEXAS INTERMEDIATE CRUDE OIL $/BARREL: JUL 2008 - JUN 2009 | WEST TEXAS INTERMEDIATE CRUDE OIL $/BARREL: JUL 2008 - JUN 2009 |