Shell profits surge following oil price recovery

Royal Dutch Shell (LON:RDSA) has reported a significant surge in their second quarter profits following a recovery in oil prices and strict cost cuttings.

Chief executive Ben van Beurden saw earnings increase by 245 percent after he spoke of “reshaping the company”. Shell saw earnings increase from $1.05 billion (£800 million) to $3.6 billion.

“Cash generation has been resilient over four consecutive quarters, at an average oil price of just under $50 per barrel,” said Ben van Beurden.

“The external price environment and energy sector developments mean we will remain very disciplined, with an absolute focus on the four levers within our control, namely capital efficiency, costs, new project delivery, and divestments.

“I am confident that we are on track to deliver a world-class investment to our shareholders.”

Compared to the second quarter of 2016, when oil was trading at around $45 a barrel, Shell has seen a drastic improvement in profits.

“Shell’s strong results this quarter show that we are re-shaping the company following the integration of BG.” continued the chief executive.

“Cash generation has been resilient over four consecutive quarters, at an average oil price of just under $50 per barrel. This quarter, we generated robust, earnings excluding identified items of $3.6 billion, while over the past 12 months cash flow of $38 billion has covered our cash dividend and reduced gearing to 25 per cent.”

“The external price environment and energy sector developments mean we will remain very disciplined, with an absolute focus on the four levers within our control, namely capital efficiency, costs, new project delivery and divestments.”

Shell is also currently working on a major cost-cutting drive and a $30 billion divestment initiative. The company has sold off over $20 billion in assets since the BG takeover, which went through despite opposition. 

The stock was up by 0.4 percent at 0900GMT.