For oil majors, money keeps flowing in

Aug. 2, 2010 at 11:54 AM
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PARIS, Aug. 2 (UPI) -- Unlike their embattled rival BP, European oil companies Royal Dutch Shell, Total and Statoil reported rising second-quarter profits.

Net profits of Shell, Europe's largest oil company by market value, rose to more than $4.5 billion, nearly double the figure during the same period last year, the company said last week.

"Shell's cost programs have delivered over $3.5 billion of annualized underlying savings," Shell Chief Executive Officer Peter Voser said in a statement. "Our investments have underpinned a 5 percent increase in oil and gas production for the quarter, a 34 percent increase in LNG sales volumes and an 18 percent increase in chemicals sales volumes."

Shell also revealed that it was planning to get rid of some assets in a bid raise the quality of its portfolio and raise cash -- mirroring a move by BP, which needs money to help pay for cleaning up the Gulf of Mexico.

The disaster in the gulf has upped the pressure on the oil industry, which has come under close scrutiny from politicians. Yet apart from BP, all oil majors are posting impressive numbers that indicate the companies are climbing out of the economic slump.

France's Total reported a 43 percent boost in second quarter profits to more than $4 billion, citing rising production levels and improving refinery activity.

Total CEO Christophe de Margerie said the gulf oil spill "reminds us that security and the environment should rest absolute priorities." He added that his company was reviewing its drilling activities.

Statoil, Norway's state-owned oil company, reported a net income of $520 million, a huge increase compared to the same period last year, when the company failed to make money.

Statoil said a 32 percent increase in oil prices, as well as higher levels of oil and natural gas production offset a 12 percent drop in natural gas prices.

"Statoil's second quarter is characterized by strong operational performance and a high activity level," says Statoil CEO Helge Lund said in a statement.

The announcements come on the heels of a bright outlook from Exxon Mobil, the world's biggest energy company and the main competitor for the Europeans.

Exxon said its profits in the second quarter of 2010 jumped to nearly $7.6 billion, almost double the amount of the same period last year.

Yet despite the good numbers, oil officials remain cautious.

Voser from Shell said he continues to see mixed signals in the global economy.

"Oil prices have remained firm so far this year, but refining margins, oil products demand and natural gas spot prices all remain under pressure ... the outlook remains uncertain," he said.

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