AMSTERDAM: Royal Dutch Shell Plc, the oil producer buying BG Group Plc for $70 billion, reported first-quarter profit that beat analysts’ estimates as refining and trading earnings countered part of the drop in crude prices.
Profit adjusted for one-time items and inventory changes fell 56 percent to $3.2 billion from a year earlier, beating the $2.5 billion average estimate of 12 analysts surveyed by Bloomberg. Spending for this year will be cut by about $2 billion to $33 billion or less, The Hague-based Shell said Thursday in a statement.
Shell is cutting investment after oil’s slump over the past year forced producers to defer projects to strengthen their balance sheets. Trading and refining operations have cushioned the bear market for Shell and other European oil majors, including BP Plc, Total SA and Statoil ASA, which all reported better-than-expected quarterly earnings this week.
“Our results reflect the strength of our integrated business activities, against a backdrop of lower oil prices,” Shell Chief Executive Officer Ben Van Beurden said in the statement. “We continue to take steps to further improve competitive performance by redoubling our efforts to drive a sharper focus on the bottom line in Shell.”
Shell rose as much as 2.1 percent to 2,094.50 pence and were trading at 2,082.50 pence as of 8:18 a.m. in London. The stock has declined 3.3 percent this year.
Average Brent crude prices fell 49 percent in the quarter from a year earlier to $55.13 a barrel. The benchmark has recovered this month, rising to about $65 a barrel as violence in the Middle East stoked supply concerns.
