Daily Star: Shell pump it up: “SHELL has restored its reputation, battered by last year's reserves debacle, by racking up a 68% rise in third quarter profits to a record £5 billion.”: “…analysts said the results demonstrated the credibility of the group's new management following the scandal, where 4.5 billion barrels were wiped from its reserves.”: Friday 28 October 2005
By LAURA NEIL
SHELL has restored its reputation, battered by last year's reserves debacle, by racking up a 68% rise in third quarter profits to a record £5 billion.
The company overcame a £193 million hit from hurricanes Katrina and Rita thanks to soaring oil prices and a one-off gain from a pipeline sale.
Its shares rose 14p to 1791p as analysts said the results demonstrated the credibility of the group's new management following the scandal, where 4.5 billion barrels were wiped from its reserves.
Chief executive Jeroen van der Veer refused to speculate on when the oil price bonanza might slow, pointing out demand remained strong and supply was running at near full strength.
Oil prices have risen as booming economies in China and India have put the strain on global / production and refining capacity.
They rose to a high of almost $71 a barrel after the hurricanes hit oil platforms in the Gulf of Mexico, V although the price has now reverted to about $60 a barrel.
Van der Veer said the hurricanes meant Shell's own production would be about 3.5 million barrels a day this year, at the lower end of its target range. Some Gulf of Mexico platforms will not resume production until next year.
He added that the profits demonstrated Shell's strategy of investing more in exploration and production, while focusing on maximising profits from refineries and petrol pumps, was paying off.
The company insisted, however, it was not benefiting at the expense of British motorists.
It said its 1,000-strong chain of UK petrol stations had just crept into profitability for the third quarter.
Van der Veer said the company had succeeded in recruiting the 1,000 technical experts it was seeking to boost its operations and plans to restore reserves were progressing well.
But some analysts were still sceptical.
"The positive Q3 results underline the credibility of the operational management, but concerns remain on reserves," said Ambrian Partners' Zac Phillips.
The reserves scandal cost chairman Sir Philip Watts his job and forced the company to change an unwieldy three-board-of-directors structure to a more conventional single board.
Shell yesterday announced it had dropped KPMG as a joint auditor to use PriceWaterhouseCoopers only.
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