Royal Dutch Shell PLC, Europe's largest oil company, reported Thursday a near doubling in second quarter profits as higher oil prices and one-time gains offset a drop in production.
Net profit of $8.66 billion was up from $4.39 billion a year earlier. The figure was helped by a $1.44 billion gain booked on a mix of tax credits, gains on hedging derivatives, and the sale of businesses.
The company's CCS profit, or profit at its current cost of supplies, was $6.55 billion excluding one-time gains, up from $4.21 billion a year earlier. The nonstandard measure, which seeks to strip out the impact of volatile oil prices on the company's earnings, is closely watched by analysts and came in slightly lower than they had forecast.
Though Shell has been investing heavily in new projects, production fell 2 percent to 3.05 million barrels per day. Excluding asset sales, production would have risen 2 percent, Shell said, with 285 thousand barrels of oil per day added from new fields in Qatar, Nigeria and Canada more than offsetting the impact of field declines.
"We have made important progress with new production in 2011, and the ramp-up of our new projects should drive our financial performance in the coming quarters," said Chief Executive Peter Voser in a statement.
Profits at upstream operations were up 85 percent to $6.06 billion, including $641 million in one-off gains from tax credits, derivative gains, and sales of operations, Shell said.
The downstream operations, which include the refining arm, saw profits drop 7 percent on a CCS basis to $1.08 billion, reflecting lower refinery intakes and worse margins. The non-CCS results included gains of $802 million, mostly from the sale of operations in Chile and the Dominican Republic.
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