Shell profit soars as big projects pay off

Reuters

By Tom Bergin

LONDON (Reuters) - Royal Dutch Shell Plc <RDSa.L> reported a big jump in second-quarter net profits helped by new projects which the company said would drive production growth in coming years.

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Shell said second-quarter current cost of supply net income rose 77 percent to $8 billion, driven by higher oil prices and helped by non-cash accounting gains and asset sales.

"It's a good result ... production volumes should ramp up in the next quarter," one dealer said.

Oil and gas production fell 2 percent to 3.05 million barrels of oil equivalent per day, due to field sales and a warm second quarter which hit European gas demand.

Excluding divestments, output rose 2 percent -- a sign that the company's large recent investment in new projects was beginning to show returns.

In the first half of the year, Shell started up three new projects, a Canadian oil sands venture and two gas plants in Qatar, in which it had invested $30 billion.

Excluding one-offs, the underlying result rose 56 percent to $6.55 billion, just below an average forecast of $6.70 billion in a Reuters poll of eight analysts.

Rival BP <BP.L> reported a 13 percent rise in underlying net profits on Tuesday, while larger rival Exxon Mobil <XOM.N> is predicted to report a 50 percent rise in underlying net income later on Thursday.

(Editing by David Holmes)

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