Shell Q4 profits plunge 75%

Oil giant Royal Dutch Shell has today posted a 75% fall in profits for the fourth quarter to $1.2 billion (£755 million), compared with the $4.8 billion the company made a year ago.

The Anglo-Dutch company, which is Britain’s second largest oil company, has been hit by a slump in demand for oil from a weak global economy.

For the full 2009-year, the company made $9.8 billion, compared with $31.4 billion in the 2008-year.

Oil prices plummeted in 2009 after hitting a peak of $147 set in July 2008.

The figures come just a few days after UK rival BP posted a 33% rise in Q4 profits to £2.16 billion ($3.45 billion) compared with the $2.59 billion reported a year earlier.

Meanwhile, Exxon Mobil, which is the world’s largest oil company, announced a 23% fall in fourth quarter profits.

Returning to Shell, chief executive Peter Voser, said: “Our fourth-quarter 2009 results were impacted by the weak global economy.

“Oil prices have increased compared with a year ago, but gas prices and refining margins have declined sharply, because of weaker demand and high industry inventory levels.” He also cautioned of an “uncertain” outlook for 2010.

The company is undergoing a restructuring programme and reduced headcount by 5,000 last year. It will slash a further 1,000 jobs this year - primarily from its downstream and corporate functions.

Discuss this in the Finance Markets forums

Story link: Shell Q4 profits plunge 75%