Rising oil prices boost Shell's profit in the first quarter

Shell's revenue in the first quarter of 2017 was higher than expected and profits doubled. After three years of bumpy times, rising oil prices boosted the performance of the oil giant.

Some highlights:

The quarterly revenue of 71.8 billion US dollars, Thomson Reuters analyst is expected to be 70.632 billion US dollars.

Basic earnings per share was 41 cents, with Thomson Reuters analysts forecasting 37 cents.

Based on the current supply cost, the profit of 3.8 billion U.S. dollars is expected to be 3.05 billion U.S. dollars, an increase of 136% from the 1.6 billion U.S. dollars in the first quarter of 2016.

The significant increase in Shell's profits reflects the continued recovery of oil prices. Compared to the lows of early 2016, the price of oil has rebounded by about 1 times. Savings and increased cash flow helped the company compensate $54 billion for the purchase of used gas and oil companies, British Natural Gas Group, and supported the third consecutive quarterly dividend payment.

Shell CEO Ben van Beurden said the results showed strong results this quarter.

Shell CEO Ben van Beurden Shell CEO Ben van Beurden

“The cash flow from operating activities was US$9.5 billion and free cash flow was US$5.2 billion, allowing us to reduce our debt and send cash dividends for the third quarter in a row,” van Beurden said in the announcement.

Shell is advancing the previously announced $20 billion divestiture program that will restart the Qatar-based project in the second quarter of 2017 and integrate with British Natural Gas Group.

Van Beurden also said that the company will invest about 25 billion U.S. dollars in new projects, and he expects that the operating activities of these new projects will generate 10 billion U.S. dollars in cash flow by 2018.

Prior to this, the other two large oil companies, ExxonMobil and BP, have disclosed bright quarterly reports. Their performance was also boosted by rising oil prices. OPEC reached a production cut agreement with Russia and other non-OPEC oil-producing countries, which promoted the recovery of oil prices.

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