Shell's upstream earnings up 86%

by Emran Hussain on Oct 28, 2010

Shell's oil and gas production for the quarter was 3,058 thousand boe/d, 5% higher than in the third quarter 2009.

Shell announced a strong improvement in its third quarter earnings compared to a year ago due to improving industry conditions, a 5% increase in oil and gas production and a 22% increase in LNG sales and increased downstream volumes.

The company made US$3.5 billion in the quarter which represented a $500 million increase from its $3 billion earnings figure in the same time last year.

For the Middle East, Shell’s Saudi Arabian operations were highlighted in the Q3 earnings report. Shell has entered into the second contract period for the South Rub Al Khali Company Limited (SRAK) joint venture – Shell’s share is 50%. SRAK will now move forward with the appraisal of the Kidan sour gas fields.


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Upstream

Shell’s oil and gas production for the quarter was 3,058 thousand boe/d, 5% higher than in the third quarter of 2009.

Production for the third quarter 2010 excluding the impact of divestments, production sharing contracts (PSC) pricing effects and OPEC quota restrictions was 7% higher compared to the same period last year.

Underlying production in the third quarter increased by some 180 thousand boe/d from new field start-ups and the continuing ramp-up of fields, more than offsetting the impact of field declines.

Strong rebound

Commenting on the results, Shell’s chief executive officer Peter Voser said: “Our results have rebounded substantially from year-ago levels, driven by some improvement in industry conditions, and Shell’s strategy. This is a better performance from Shell, achieved despite continued difficult industry conditions in refining and natural gas markets.

“We are making good progress on implementing our strategy, with a focus on performance improvement, delivering a new wave of growth, and maturing the next generation of growth options for shareholders, with achievements in all of these themes during the quarter.â€