Royal Dutch Shell Plc (RDSA), Europe’s biggest oil company, said second-quarter earnings almost doubled on higher oil prices as it started projects in Qatar and Canada.
Net income rose to $8.66 billion from $4.39 billion a year earlier, The Hague-based Shell said today in a statement. Excluding one-time items and inventory changes, profit matched analyst estimates. Production fell 2 percent.
“Shell remains our preferred oil major,” Lucas Herrmann, a London-based analyst at Deutsche Bank AG, said before the results were released. It has “been a good quarter for Shell with a number of the major projects making very promising progress.”
Chief Executive Officer Peter Voser is ramping up production with a $100 billion investment plan through 2014. Shell started the Pearl gas-to-liquids and Qatargas 4 liquefied natural-gas ventures this year. It’s also increased output at an oil-sands project in Canada’s Alberta region.
Shell posted adjusted earnings of $6.6 billion, matching the mean estimate of nine analysts surveyed by Bloomberg.
BP Plc, Shell’s smaller rival, earlier this week reported profit that missed analyst estimates following field disruptions in the Gulf of Mexico, Angola and the North Sea. Exxon Mobil Corp. (XOM), the largest U.S. oil company, is scheduled to release earnings later today.
Brent crude futures, the benchmark for two-thirds of the world’s crude, were on average 48 percent higher in the second quarter compared with the year-earlier period. U.K. natural-gas prices were 58 percent higher.
Prelude Floating LNG
Shell is expanding in Australia after agreeing in May to invest as much as $12.6 billion in the Prelude floating liquefied natural gas project. Earlier this month, it agreed to join Japan’s Inpex Corp. in a floating LNG project off Indonesia.
In the Gulf of Mexico, Shell started the Cardamom field development last month. In May, the company warned that its oil and gas production may be curbed by 50,000 barrels a day in the Gulf because of delays in receiving drilling permits following the Macondo crude spill last year.
Shell completed a $1.8 billion Texas gas field sale to Occidental Petroleum Corp. this year and also disposed of stakes in Canada, Pakistan and the U.K. This month it agreed to sell assets in Brazil.
Last month, Shell concluded the creation of a $12 billion biofuel joint venture with Cosan SA Industria & Comercio in Brazil. The partners plan to make transport fuel from wheat stalks and sugar-cane bagasse, a sugar industry waste product, in anticipation that the share of renewable energy in fuel will double in the next 10 years.
Of the 36 analysts that cover Shell, 26 recommend buying the shares, five have “hold’ ratings and one advises investors to sell the stock.
To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net
To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net
