Shell reports substantial quarterly drop
Sign from a Shell gas station
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Steve Chiotakis: Shell oil posted a huge drop in quarterly earnings. While the company made nearly $5 billion in the final three months of last year, profits dropped sharply -- 56 percent from the previous quarter. From London, here's Stephen Beard.
Stephen Beard: Last year, Shell made the biggest corporate profit in European history: $31.4 billion. But that was for the full 12 months. It was due to the soaring price of crude in the first half of 2008. By the end of the year, the oil price had collapsed, and Shell's profits were showing some wear and tear.
Nick McGregor is with brokers Redmayne Bentley. He says the dwindling price of oil is very bad news for Shell. The company specializes in expensive exploration projects:
Nick McGregor: Shell of course is one of the big, big investors in tar sands and Canadian oil sands. And those sorts of projects have become totally uneconomical with oil prices at current levels. So for a pay-off on those sorts of areas, they really do need to see a climb in prices from here.
The oil cartel OPEC says it's determined to make that happen. The OPEC head says: If the oil price continues to fall, we will make further cuts in production.
In London, this is Stephen Beard for Marketplace.