The Guardian: Shell announces £5.8bn profits:  “Last year, Shell was hit by a reserves scandal which saw it forced to downgrade its oil reserves by around one fifth. The extra injection of cash for exploration is designed to allay investor concern that the oil giant is struggling to replace its reserves. Two weeks ago, Shell announced that its exploration and production unit had suffered a new setback when it revealed that its flagship Sakhalin II gas project was likely to cost $20bn - twice its original budget.”: Thursday 28 July 2005

Mark Tran

Thursday July 28, 2005

Royal Dutch Shell today reported half-year profits of £5.8bn in its first results as a unified company.

The oil giant's profits - equivalent to £1.3m an hour - were in line with the figures released by its rival BP earlier this week, which established a new record for a UK company.

Shell said it had benefited from high oil prices, which have continued to rise this year because of strong demand, particularly from China.

The company also pledged to increase the amount of money spent on exploring for new oilfields to $1.8bn (£1.03bn) from $1.5bn both this year and next.

Last year, Shell was hit by a reserves scandal which saw it forced to downgrade its oil reserves by around one fifth. The extra injection of cash for exploration is designed to allay investor concern that the oil giant is struggling to replace its reserves.

Two weeks ago, Shell announced that its exploration and production unit had suffered a new setback when it revealed that its flagship Sakhalin II gas project was likely to cost $20bn - twice its original budget.

However, on the positive side it announced 12 drilling successes in the second quarter, including fields in Australia and Nigeria. More than 3.52m barrels of oil equivalent were produced each day, which Shell described as "slightly above our expectations".

"We can confirm exploration success, and are further increasing our exploration spending and activity levels," Jeroen van der Veer, the Shell chief executive, told investors.

Shell became a unified company this month. It was previously co-owned by Dutch and British holding firms, which appointed executives to a joint management board.

The decision to unify it followed the reserves fiasco, which was blamed on the dual structure of the company.

Shell was down 11p, standing at 1,723p in early trading.

http://www.guardian.co.uk/oil/story/0,,1537744,00.html

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