Shell's strategy is working, the company's CFO said after posting a net profit of more than $4 billion. File photo by Mohammad Kheirkhah/UPI | License Photo
Nov. 2 (UPI) -- A day after closing on the sale of billions of dollars in assets, Shell said its net quarterly profit of more than $4 billion showed "our strategy is working."
"The competitive performance is further evidence of Shell's growing momentum and strengthens our firm belief that our strategy is working," Chief Financial Officer Jessica Uhl said.
Shell said Thursday its net profit of $4.1 billion came from all of its business segments, though earnings came mainly from refining, higher production from new fields and improved market conditions.
Net profit for the second quarter was $3.6 billion, up from the $1 billion reported for the second quarter 2016, but down about 4 percent from the first quarter. The price for Brent crude oil was near $51 per barrel when Shell announced second quarter results and was around $60.50 per barrel early Thursday.
"Upstream [exploration and production] generated almost half of the $10 billion cash flow from operations excluding working capital this quarter, at an average Brent oil price of $52 per barrel," CEO Ben van Beurden said in a statement.
Realized crude oil prices were 4 percent better than the second quarter. Lower crude oil prices last year hobbled most major oil companies and Shell, retooling after its tie up with British company BG Group, set a target of trimming $30 billion from its portfolio by 2018.
The completion of sales of assets in Gabon and in the North Sea, announced Wednesday, put the company $4.4 billion closer to its goal and Uhl said Shell has completed $20 billion in divestments to date. Capital spending in the third quarter was lower than the second by 11 percent.
Uhl said the performance tooled Shell for future success as a "nimbler" company.
For exploration and production, Shell highlighted operations in the oil-rich Niger Delta region of Nigeria. From the second phase of its Gbaran-Ubie project, which started this quarter, Shell expects peak production of around 175,000 barrels of oil equivalent per day by 2019.
Nigeria is a member of the Organization of Petroleum Exporting Countries exempt from a multilateral deal to balance an over-supplied market with production cuts because it needs oil revenue for national security purposes.