Amsterdam: Royal Dutch Shell PLC reported a 21% increase in fourth-quarter earnings Thursday, buoyed in part by high energy prices and its sale of some operations. The company also said it had taken important steps to bulk up its proven reserves, damaged in a 2004 accounting scandal.
But without the divestments and other one-time items, Shell’s earnings from oil production fell 3% and overall quarterly sales were flat.
Net profit rose to $5.28 billion (Rs23,337.6 crore), up from $4.37 billion, while sales were unchanged at $75.5 billion.
Shell said it expected to have added around 2 billion barrels of oil to its proven reserves in 2006, 700 million barrels more than the 1.3 billion it pumped, under US accounting rules.
Shell said it added twice as much as it pumped when taking into account oil-rich sands, which new technologies are making possible to develop, but cannot be counted as proven reserves. Shell has been seeking new sources of oil since it was forced to cut proven reserves by nearly a third after the scandal.
In addition, the company must make up ground it lost in December, when Russia’s state-controlled OAO Gazprom grabbed control of a massive oil project on Sakhalin island, forcing Shell to cut its 55% stake to 27.5% in exchange for a $4.1 billion payment. Shell said Thursday that means a reserve cut of 400 million barrels in 2007.
Chief Executive Jeroen van der Veer said the company’s short-term outlook “continues to be impacted by security problems in Nigeria, affecting 2007 production and future growth.”