Royal Dutch Shell experiences substantial profits amid higher oil prices
The Royal Dutch Shell oil company has experienced a quarterly profit increase of almost 50 percent, due to the recent boost in oil prices and their current standing as one of the foremost red diesel suppliers. The company’s profits were 4.9 billion US dollars, up 49 percent compared with the same period in 2009. This is in stark contrast to the last quarter of 2009, when Shell only managed a profit of 1.2 billion US dollars, less than one quarter of the profits for the following quarter. The company also planned to axe 2,000 jobs by the end of 2010, which would help reduce overall costs by up to 1 billion US dollars.
Chief executive of Shell, Peter Voser, said that the dramatic turnaround in these results was as a result of the company’s careful response to the poor data from last year, which prompted officials to explore new oil fields and drive new growth in production. However, the rise in the price of oil also played a role, which has almost doubled in the last year. In 2009 a barrel of oil cost 41 US Dollars, in the first quarter of 2010 it would cost 76 US Dollars.
However, Voser expected the rest of the year to be more mixed for Shell, citing heavy pressure on gas prices and demand for oil, despite the fact that there is now a steady recovery taking places from the global recession. This could mean a further increase in oil price and stronger demand for petrochemicals. BP, the company’s main rival, has recently reported first quarter profits of 5.6 billion US dollars, more than double the 2.4 billion a year ago.
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