LONDON-- Royal Dutch Shell PLC on Thursday reported a 7% rise in
first-quarter profit despite a steep fall in revenue, giving
investors a glimpse of the impact weak oil prices are having on the
business.
The giant Anglo-Dutch oil company's quarterly profit on a
current cost-of-supplies basis--a number similar to the net income
that U.S. oil companies report--was $4.76 billion, up from $4.16
billion a year earlier. Revenue fell to $65.71 billion from $109.66
billion a year earlier.
Profit rose despite the weaker revenue because of lower costs
and one-off items, including disposals and a tax break in the U.K.
The prior-year period was hit by exceptional items.
Production from the "upstream" division, which finds and
produces new oil and gas, fell 2% to 3.17 million barrels of oil
equivalent a day, hit by disposals, expiration of a license in Abu
Dhabi, the impact of production sharing contract prices, and
security issues in Nigeria, Shell said.
The oil major added that it expects production in the second
quarter to fall by about 400,000 barrels of oil a day compared with
the second quarter of 2014. It gave a number of reasons for the
forecast fall, including recent disposals, the planned maintenance
impact from the Pearl GTL in Qatar, deepwater Gulf of Mexico and
heavy oil in Canada.
Earlier this month, Shell agreed to buy BG Group in a $70
billion deal, sparking speculation that weak oil prices could spur
consolidation throughout the industry.
The company declared an unchanged dividend of $0.47 a share
"Our results reflect the strength of our integrated business
activities, against a backdrop of lower oil prices," Chief
Executive Ben van Beurden said.
"Meanwhile, in what is clearly a difficult industry environment,
we continue to take steps to further improve competitive
performance by redoubling our efforts to drive a sharper focus on
the bottom line in Shell," he added.
Write to Ian Walker at ian.walker@wsj.com and Sarah Kent at
sarah.kent@wsj.com
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