Shell announces second quarter and half year 2010 results and interim dividend
Thursday, Jul 29, 2010
At 07.00 BST (08.00 CEST and 02.00 EDT) on Thursday 29 July, 2010 Royal Dutch Shell plc released its second quarter and half year 2010 results and second quarter interim dividend announcement for 2010.
“We are delivering on our strategy. Shell’s cost programmes have delivered over $3.5 billion of annualised underlying savings. Our investments have underpinned a 5% increase in oil and gas production for the quarter, a 34% increase in LNG sales volumes, and an 18% increase in chemicals sales volumes. This is a good performance from Shell, despite today’s challenging macro economic conditions. We are on track for growth.
We are making good progress on delivering performance improvement, a new wave of production growth, and maturing the next generation of growth options for shareholders.
The corporate restructuring programme we announced a year ago, called Transition 2009, is now complete. The three new businesses, created in Transition 2009 – Upstream Americas, Upstream International, and Projects & Technology – are a powerful platform for a faster implementation of strategy, clearer accountabilities, and a competitive focus. Transition 2009, restructuring in corporate functions, and our initiatives in Downstream have resulted in annualised underlying cost savings of over $3.5 billion, exceeding the target by around 15% and some 6 months ahead of schedule. Approximately 7,000 employees will leave Shell as a result of these changes, some 18 months earlier than planned.
We have exceeded the targets we set last year for costs and staff reduction. We are putting new emphasis on “continuous improvement”, which will drive competitive financial and operating performance through the business cycle, and build on Shell’s high safety and environmental standards. Capital efficiency is an important part of our continuous improvement drive. We will exit from non-core positions, both in Upstream and Downstream as we refocus our portfolio on material positions with growth potential. We expect $7-8 billion of asset sales in 2010-11, as we accelerate our disposal plans.
Shell is in a delivery window for new growth. Gbaran-Ubie, on stream at the end of the second quarter, the 4th of 13 new project start-ups in the 2010-11 timeframe, which underpin Shell’s cash flow and production growth targets for 2012.”
Turning to longer term opportunities, Voser commented: “We continue to make good progress generating growth options. During the second quarter, we announced the acquisition of substantial new positions in US on-shore gas, with the purchase of East Resources, Inc., which is a leader in the Marcellus shale, and new acreage in the liquids-rich Eagle Ford shale gas play in South Texas.
We continue to see mixed signals in the global economy. Oil prices have remained firm so far this year, but refining margins, oil products demand and natural gas spot prices all remain under pressure. Our earnings and cashflow have rallied from 2009’s lows, but the outlook remains uncertain.”
Commenting on the industry situation in the Gulf of Mexico, Voser said: “The BP Macondo blow-out and the related Gulf of Mexico oil spill is a tragedy for everyone affected. We were all shocked by the loss of life there, and the on-going and wide-spread impacts from the spill. World-wide deep water production has an important role to play in the global energy supply equation, with potential for production growth with supply diversity, and sustained investment in technology, jobs and services. The recent announcement of Shell’s participation in a new, $1 billion Gulf of Mexico oil spill containment system, is an example of where we are working with governments and partners to improve the industry’s capabilities. ”
Voser concluded: “I am pleased with the results in the second quarter 2010. We are putting the priority on a sharper delivery of our strategy, aiming for profitable growth and a more competitive performance from Shell.”
Source: Shell
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