Published July 27, 2012
| Associated Press
The chief executive of Royal Dutch Shell PLC on Thursday said that whichever political party wins the U.S. presidential election in November should formulate an energy policy with a view to achieving "near energy independence" within 20 years.
Swiss CEO Peter Voser, who heads Europe's largest oil company, was speaking after his company's second quarter earnings showed a greater than expected decline in profits, due mostly to lower oil prices.
At a meeting with analysts in London, Voser said that energy independence could be possible using a combination of newly-available technologies for extracting oil in difficult-to-reach areas, including the icy Alaska seas where Shell is undertaking exploratory drilling this summer, deep sea operations in the Gulf of Mexico, heavy oil sands, and especially developing the US's large natural gas reserves would all help.
"On top of it all, it would bring manufacturing industries back into the country, petrochemical industry back into the country, because you have a cheap feedstock," in the form of natural gas, Voser said.
"I think whoever is in charge of energy policy...will look at this on the one side as a secure energy policy but on the other side also about jobs and revenues."
Shell's "current cost of supplies" earnings – a figure that strips out the impact of swings in the price of oil between its production and sale – was $6.0 billion ((EURO)4.94 billion), compared with $8.0 billion in the second quarter a year ago, the company said Thursday.
"Our profits have fallen with energy prices," said Voser.
Net profit fell 53 percent to $4.06 billion from $8.66 billion: in 2011 the company booked $1.44 billion worth of asset sales. Production rose 1.9 percent to 3.103 barrels of oil per day from a year ago, but was down from the previous quarter as several large Shell facilities were off-line for maintenance during the quarter.
The company's sales fell to $117.1 billion from $121.2 billion a year ago.
The main reason for the fall was lower oil prices: prices are down more than 40 percent from the second quarter of 2011. At Shell's production arm, earnings fell 23 percent to $4.69 billion from $6.06 billion.
The company's shares closed down 2.3 percent at (EURO)27.275 ($33 44) in Amsterdam.
"Maintenance and outage issues have put pressure on the upstream business, whilst the deterioration in the oil price of late has weakened profitability," said analyst Keith Bowman of Hargreaves Landsdown in London. "At a time when investors are looking towards blue chip reliability, the disappointment contained in the headline figures is palpable."
He said Shell remains his favorite pick in the sector because of its potential for expanding production in the coming years.
At Shell's "downstream" operations, which include refining and chemical sales, the company's performance improved 20 percent to $1.3 billion, excluding the impact of asset sales.