Royal Dutch Shell reported a first quarter 2015 net income of $3.2 billion, 56% down from the $7.3 billion in the first quarter 2014.
Shell said in a statement that compared with the first quarter 2014, net income benefited from improved Downstream results reflecting steps taken by the company to improve financial performance, higher realised refining margins, lower costs, and increased trading contributions.
In Upstream, earnings were impacted by the significant decline in oil and gas prices and lower trading contributions. Weaker exchange rates resulted in a hurt to deferred tax positions of some $700 million compared with the first quarter 2014. This was partly offset by lower costs and new high-margin liquids production volumes from new deep-water projects and improved operational performance.
Royal Dutch Shell Chief Executive Officer Ben van Beurden said, “Our results reflect the strength of our integrated business activities, against a backdrop of lower oil prices. Meanwhile, in what is clearly a difficult industry environment, we continue to take steps to further improve competitive performance by redoubling our efforts to drive a sharper focus on the bottom line in Shell.”
He added that part of this sharper focus is the sale of non-strategic assets. Asset sales total over $2 billion so far this year, as the company reduced its onshore footprint in Nigeria.
“In parallel we continue to reduce our operating costs and capital spending; and by deferring and reshaping new projects, we can achieve further efficiencies and savings in the global supply chain,” said van Beurden.
The company’s proposed combination with BG, revealed in April, is intended to accelerate Shell’s growth strategy in deep water and LNG, and create a springboard for further optimisation of its asset base, particularly when evaluating the longer-term portfolio.
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Image: Shell