• Thursday, May 30, 2024
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BusinessDay

Shell Q1 Profits up despite Nigerian disruptions

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Royal Dutch Shell Plc, Europe’s biggest oil company, reported an increase in first-quarter earnings on new projects and refining, despite some disruptions to its Nigerian operation.

Earnings excluding one-time items and inventory changes rose 3 percent to $7.5 billion from a year ago, Shell said today in a statement.

That beat the $6.4 billion average estimate of 11 analysts surveyed by Bloomberg.

Shell last month shut the Nembe Creek pipeline and declared force majeure on Bonny Light oil exports for the second time this year because of sabotage and theft in Nigeria.

Its gas supplies to Nigeria LNG Ltd. were also disrupted in the quarter.

“Shell’s volumes are impacted by increased levels of bunkering in Nigeria,” Oswald Clint, a London-based analyst at Sanford C. Bernstein & Co., said before the earnings statement.

Shell was “aided by the cold European winter and the benefit of a full quarter’s contribution from Pearl” gas-to- liquids project in Qatar, Lucas Herrmann, a London-based analyst at Deutsche Bank AG, said before the report was released.

U.K. gas prices were about 25 percent higher in the first quarter from a year earlier because of higher demand for heating.

Shell is the fourth-largest gas supplier from the U.K. North Sea fields and together with Exxon Mobil Corp. is pumping the fuel from the Dutch Groningen field, one of the largest in the world.

Shell plans to raise volumes to about 4 million barrels a day as soon as 2017.

The company has boosted output at its $19 billion Pearl venture, reaching full capacity in January after a delay of about six months.

Shell is the last of Europe’s biggest oil producers to publish earnings; BP Plc and Total SA saw their first-quarter profits drop on lower oil prices and a decline in output.

Shell suspended drilling off Alaska in February after disruptions and damage to two drilling vessels last year. Shell had spent about $5 billion over seven years preparing to explore the Beaufort and Chukchi seas