31 January 2013

Nigeria: Shell Assures of Higher Dividends, Records Decline in Profit

Royal Dutch Shell has assured shareholders of an increase in dividend in 2013, despite recording a decline in profit for its 2012 financial year.

The company also announced plans to increase its total output to four million barrels of oil and gas equivalent per day between 2017 and 2018. According to the result released, Thursday, the company's profit on a current cost of supplies basis fell by six per cent to $27 billion.

The company, a major operator in the Nigerian upstream petroleum sector, said its dividend payment for 2013 will rise by 4.7 per cent to $0.45 per share.

The decline in its total earnings was as a result of poor performance at upstream business - which covers exploration and production. Profit in its upstream business dipped by 14 per cent to $4.4bn.

The oil major also posted fourth quarter profit that missed expectations, rising 15 per cent to $5.58 billion on an adjusted current cost of supply basis, due, in part, to stronger refining margins and compared with a forecast for $6.2 billion.

In a statement, the company said: "Earnings were lower than in the fourth quarter 2011 mainly due to increased operating expenses, higher depreciation and higher exploration expenses."

But although production profits were down, Shell's production volumes increased by 3.3 per cent to 3.41 million barrels of oil or natural gas equivalents per day.

Peter Voser, Chief Executive Officer, Shell, said the economic outlook remained uncertain, but insisted he saw a bright future for the oil and gas industry.

The company said population increases and improving standards of living in developing companies helped push up energy demand across the world.

According to him, Shell's efforts to expand its pipeline of potential energy projects are paying off.

"Our drive to increase our options for future projects means that we are more constrained by limits on capital than by limits on opportunities," he added.

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