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Shell posts record gains, prompts criticism over prices

31/01/2008

Royal Dutch Shell has posted record earnings as oil prices reach new highs during its fourth quarter.

Oil prices have nearly doubled over the past year, peaking at $100 a barrel in early January.

Relatively unaffected by global economic turmoil, Shell and others have fared well despite the increasing price of crude oil.

Shell saw a 60 per cent increase in year-on-year net income during its fourth quarter, leaping from $5.28 billion (£2.64 billion) to over $8.4 billion (£4.2 billion), according to its quarterly update.

"Overall these are satisfactory results. We made good progress in 2007, launched new projects upstream and downstream, and achieved exploration successes," said Shell chief executive Jeroen van der Veer.

"The execution of our strategy is on track."

The Anglo-Dutch refiner said gross profits increased 27 per cent while full-year profits for 2007 climbed 23 per cent to $31.3 billion (£15.65 billion) from $25.4 billion (£12.7 billion) 12 months prior.

The company's record profits come as many consumers face mounting financial pressures following the credit crunch, with petrol prices increasing dramatically over the last few months.

The wide profit margins have drawn criticism for the company.

Unite, the UK's largest trade union, called the companies profits "obscene" and suggested that consumers question the "excessive, mega-profits".

Tony Woodley, joint general secretary of Unite, said the company should be forced to pay a "windfall tax".

"These companies can afford it. Many pensioners cannot afford to live. It's as simple as that," he said.

Shares in the world's second-largest oil company have chipped off 6p, or 0.34 per cent, to 1,783p in early trading today in London on concerns over its oil reserves and weak refining margins.