Shell outperforms Q3 expectations; profit jumps
(FinancialPress) — Strong refining paved the way for Royal Dutch Shell (RDSA) to report a rise in quarterly profits of almost 50 percent. Strong cash generation shows that the Anglo-Dutch company has managed to apply the necessary changes to thrive in a world of low oil prices.
The oil and gas company acted on Chief Executive Officer Ben van Beurden‘s preparations to face “longer forever“ oil prices after the 2014 drop, which included a wave of cost cuts and asset sales. This has led to a strong increase in its cash generation for recent quarters.
Referring to downstream operations, oil and gas, van Beurden said in a statement: “Shell’s three businesses all made resilient contributions to this strong set of results.“
Even with oil prices were to return to the $50 a barrel range, Shell and most of its competitors have adapted to the landscape in order to still be able to generate profit and now opt to focus in growth of their business. The average oil price for the quarter was $52 a barrel. Today, the price stands at above $60 per barrel.
BP (BP) revealed it managed to balance its books around a $49 barrel, this week.
Signaling a revitalization of their growth efforts, Shell won half of the blocks up for auction to develop Brazil‘s deepwater oil last week. Competitors BP and Exxon Mobil Corp (XOM) also acquired blocks. This marked a historic opening to foreign operators to the formerly closed off brazilian market.
Shell shares were not considerably affected by the quarterly report.