The Netherlands: Shell Q3 LNG Sales Reach 4.76 Million Tonnes

Royal Dutch Shell plc today released its third quarter results.

Key features of the Third quarter 2011

• Third quarter 2011 CCS earnings were $7,246 million, 106% higher than in the same quarter a year ago.
• Third quarter 2011 CCS earnings, excluding identified items, were $7,001 million compared with $4,933 million in the third quarter 2010.
• Basic CCS earnings per share increased by 104% versus the same quarter a year ago.
• Basic CCS earnings per share excluding identified items increased by 40% versus the same quarter a year ago.
• Cash flow from operating activities for the third quarter 2011 was $11.6 billion, compared with $9.0 billion in the same quarter last year. Excluding net working capital movements, cash flow from operating activities in the third quarter 2011 was $10.6 billion, compared with $8.1 billion in the same quarter last year.
• Total cash dividends paid to shareholders during the third quarter 2011 were $1.9 billion. During the third quarter 2011, some 22.3 million Class A shares, equivalent to $0.7 billion, were issued under the Scrip Dividend Programme for the second quarter 2011. Some 25.3 million Class B shares, equivalent to $0.8 billion, were bought back for cancellation during the quarter under our share buyback programme commenced to offset dilution created by shares issued under the Scrip Dividend Programme.
• Net capital investment for the third quarter 2011 was $6.1 billion. Capital investment for the third quarter 2011 was $7.9 billion.
• Return on average capital employed (ROACE) at the end of the third quarter 2011, on a reported income basis, was 16.4%.
• Gearing was 10.8% at the end of the third quarter 2011 versus 19.0% at the end of the third quarter 2010.

Upstream

• Liquids and natural gas production for the third quarter 2011 was 3,012 thousand boe/d, 2% lower than in the third quarter 2010. Production for the third quarter 2011 excluding the impact of divestments of some 100 thousand boe/d was 2% higher than in the same quarter last year.
• New field start-ups and the continuing ramp-up of fields contributed some 270 thousand boe/d to production in the third quarter 2011, which more than offset the impact of field declines.
• LNG sales volumes of 4.76 million tonnes in the third quarter 2011 were 12% higher than in the same quarter a year ago.

Downstream

• Oil Products sales volumes for the third quarter 2011 were in line with the third quarter 2010. Excluding the impact of divestments and the effects of the formation of the Raízen joint venture, of some 110 thousand b/d, sales volumes were 2% higher than in the same period last year. Chemical product sales volumes in the third quarter 2011 decreased by 9% compared with the third quarter 2010.
• Oil Products refinery availability in the third quarter 2011 was 94%, compared with 93% in the third quarter 2010. Chemicals manufacturing plant availability was 90%, compared with 94% in the same period last year.

Royal Dutch Shell Chief Executive Officer Peter Voser commented:

“We continue to make good progress with our strategy; improving our competitive performance, delivering a new wave of production growth, and maturing the next generation of growth options for shareholders.

Our profits pay for Shell’s substantial investments in new energy projects, to ensure low-cost, reliable energy supplies for our customers and to create value for our shareholders. Our third quarter results were higher than year-ago levels, driven by higher oil prices and Shell’s performance.

In Upstream, our oil and gas production excluding divestments grew by 2% from year-ago levels, driven by the continued ramp-up of our growth projects, mainly in Qatar and Canada. Shell’s LNG sales volumes increased by 12%, with continued robust demand for gas. Our Downstream results were supported by increased Chemicals earnings, with a resilient performance from Oil Products, despite the more difficult economic environment. We have resumed our share buyback programme, with $0.8 billion of buybacks during the quarter, at a time when financial markets have been weak.

 Disposal of non-core assets is an important part of our drive to improve Shell’s competitive position and capital efficiency. We completed $6.2 billion of asset sales this year, with $1.8 billion in the third quarter 2011, including a refinery in the United Kingdom and non-core upstream assets in the Americas. We have delivered on our target for $5 billion of disposals this year, ahead of schedule. Asset sales from non-core positions will continue.

We are delivering on our growth strategy, with the build-up of production from new projects. The Athabasca Oil Sands Project Expansion 1 in Canada and the Pearl Gas-to-Liquids (GTL) Train 1 in Qatar have ramped up and production should stabilise at plateau rates shortly. We expect to start up Train 2 of Pearl GTL before the end of 2011, as planned. These projects in Qatar and Canada are part of a series of over 20 new upstream start-ups planned for 2011-14, as we deliver on our plans for sustainable growth, driving Shell’s financial and operating targets for 2012.

We continue to mature new investment options for medium-term growth, taking final investment decision on the Clair Phase 2 development in the United Kingdom, and the Wheatstone LNG project in Australia, confirming a new oil discovery in French Guiana, and also building new acreage positions for exploration drilling in the future.

Voser concluded: “We are making good progress against our targets, to deliver a more competitive performance.”

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Source: Shell, October 27, 2011