Low oil prices hurt Shell's Q2 results (Roundup)

Jul 30, 2009, 13:16 GMT

Amsterdam - Oil giant Royal Dutch Shell reported Thursday that its net earnings plunged to 2.3 billion dollars in the second quarter of 2009, as income was hit by lower oil prices.

The figure - compared with earnings of 7.9 billion dollars in the same quarter last year - was also below analysts' predictions of 2.48 billion dollars for the quarter.

Shell said its production came to 2.96 million barrels a day, compared with 3.3 million barrels in the same 2008 quarter.

The company said it would pay its shareholders 0.42 dollars in dividend per share, an increase of 5 per cent over the dividend per share for the same period in 2008 and also more than the 0.40 dollars per share expected by analysts.

Royal Dutch Shell CEO Peter Voser said his corporation continues to suffer from the global economic crisis.

'Energy demand is weak,' he said, adding 'there is excess capacity in the market' while industrial costs remained high.

A 'quick recovery' was not to be expected. But, he said, Shell would 'adapt to this new situation.'

Shell's restructuring programme 'Transition 2009,' first announced in June, would 'sharpen the company's focus on delivery and affordability,' Voser said.

Among others, Transition 2009 includes a reduction by 20 per cent of senior management positions and 'substantial further staff reductions.'

Oil prices hovered at between 60 and 70 dollars a barrel recently - well below the high of 147 dollars a year ago.

On Tuesday, Shell's rival British Petroleum (BP) announced in its quarterly report the oil giant had suffered from the low oil price.

Profits at BP were cut by more than 50 per cent in the second quarter of the current financial year.

BP's large-scale cost reduction plan included some 3,000 job cuts last year and another 5,000 by the end of this year.