MercoPress. South Atlantic News Agency

Shell reports sharp fall in quarterly profit with outlook “very uncertain”

The fall in the price of oil and demand retraction has a big impact on earnings

Anglo-Dutch oil giant Royal Dutch Shell reported Thursday its quarterly profit fell sharply, and warns the outlook remains “very uncertain”. The company said profit for the three months to September fell 73% to 3 billion US dollars from a year earlier. “We are not expecting a quick recovery,” Shell chief executive Peter Voser said.

BP, its UK rival, this week reported its third-quarter profits were well ahead of expectations.

Global crude prices hit a record 147 USD a barrel last year, before falling back as the world recession took hold. US light crude is currently at 77 USD after a big drop this week.

Shell said its oil and gas production for the third quarter was 2.9 million barrels of oil equivalent per day, similar to the same quarter last year.

“We see some indications that energy demand and pricing are improving, but the outlook remains very uncertain,” Mr Voser said.

The company said it had reduced costs by one billion USD in the first nine months of the year. Europe's biggest oil firm also said net profit was 3.25 billion, compared to 8.45 billion in the same quarter a year ago. That beat analyst predictions of about 2.4 billion.

Meanwhile, sales fell 43% to $75bn.

Shell said its cost reduction program, started earlier this year, will see 5,000 employees leave Shell in 2009, representing a 10% cut in those divisions.

“Our strategy remains on track, although the near-term industry outlook remains challenging,” Mr Voser added.