Royal Dutch Shell's
Net income for the quarter for the world's second-largest publicly traded energy company -- behind only ExxonMobil
The company's biggest unit, exploration and production, experienced a 6.3% reduction in its earnings to $3.5 billion, in part as a result of lower oil and gas price realizations and reduced production. The selling price in the quarter dipped to $54.45 per barrel, from the prior year's $57.39 first-quarter average.
A portion of the company's volumes decline related to its being a major player in Nigeria, which has been wracked by sectarian violence that has resulted in damage to a number of production facilities, both in the Niger Delta and offshore. For the quarter, the company was hit by a per-day drop of 78,000 net barrels in Nigeria, and at quarter's end, about 188,000 barrels per day of its Nigerian production was shut in. While efforts "continue towards restoring safe operational conditions in the Niger Delta," Shell remains unable to provide either an anticipated date for a resumption of production or a rate that output might achieve.
As with most major integrated companies that have reported thus far, Shell grew its oil products (refining and marketing) earnings somewhat during the quarter. However, the 11.6% improvement to $1.49 billion apparently would have been higher, but for lower refinery utilizations.
So, Fools, all in all -- and especially in the face of the slow, steady increases in crude prices the world is experiencing -- Shell's quarter was not a bad one. And because of the growing importance of the energy sector, along with my feelings about the attractiveness of the international integrated companies, I would suggest that my Foolish friends study Shell carefully, perhaps along with ExxonMobil, Chevron
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