Oil giant Royal Dutch Shell has posted first-quarter profits of £2.26 billion – down 58 per cent on a year earlier.
The Anglo-Dutch firm made profits of £22 billion last year but in line with BP yesterday it said the weaker global economy had impacted its performance.
As well as oil prices below $50 a barrel, having peaked at $147 in July, Shell has been affected by security concerns in Nigeria, Opec quota restrictions and weakening industrial demand for gas.
Chief executive Jeroen van der Veer said the company continued to make “significant investments” in order to maintain future profitability.
He added: “Industry conditions remain challenging, and our focus is on capital discipline and costs. We are taking a prudent approach to this downturn, focused on sustaining a strong position in the energy landscape.”
Yesterday’s figures were ahead of market expectations, with profits before exceptional items of £2.03 billion well ahead of the £1.78 billion forecast in the City.
BP reported a sharp drop in profits 24 hours earlier, with its first-quarter haul falling 62 per cent to £1.64 billion, a figure also stronger than City forecasts.
Steep profit falls are also expected this week from United States companies ExxonMobil and Chevron.
Shell pledged earlier this year to maintain net investment at near to last year’s level of £21.9 billion in order to safeguard profitability. The company has moved into more expensive areas of production such as tar sands. Jason Kenney, oil analyst at ING: “The downstream trading boost for quarterly earnings was a real surprise this quarter for both Shell today, and BP yesterday.”