Shell Profit Boosted by Oil Prices, Asset Sales

Royal Dutch Shell beat all forecasts with third-quarter current cost of supply (CCS) net profit up 71 percent at $10.9 billion, as high oil prices and asset sales outweighed a 7 percent drop in oil and gas production.

The world's second-largest non-government controlled oil company by market value said on Thursday it was well placed to continue paying dividends and investing, even at lower energy prices.

"A good performance, all divisions have performed well. The big driver seems to be the downstream. It was much better than expected," Alexandre Weinberg, analyst at Petercam said.

Shell benefited from a 54 percent rise in crude in the third quarter compared to the same period last year, but prices have since dropped to around $70/barrel from a record above $147, raising fears oil companies may not be able to continue raising their generous dividends.

Shell said production of oil and gas fell 7 percent due to hurricane outages in the Gulf of Mexico, a dearth of new field startups and the impact of production sharing contracts under which it receives less oil from projects when prices rise.

Shell said the CCS result, which strips out unrealised gains or losses related to changes in the value of fuel inventories, included a gain of $2.06 billion due to non-operating items, mainly the sale of a German gas network, and non-cash gains of $800 million.

Excluding these items, the CCS net profit was $8.04 billion, ahead of an average forecast of $7.195 billion from a Reuters poll of six analysts.

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