Shell profits from BP problems

Shell Oil truck

TEXT OF INTERVIEW

Doug Krizner: Europe's largest oil companies delivered record earnings. In the second quarter, Royal Dutch Shell made more than $8.5 billion.

Carl Mortished's international business reporter for The Times in London. Carl, how is Shell making so much money?


Carl Mortished: Well, they're making so much money, as all major oil companies are, by making gasoline and diesel for cars and trucks. And one of the interesting things about this set of results from Shell is that they're actually profiting from BP's problems. Because while BP is short of gasoline and diesel, they are driving up the profits for others. And Shell made an extra $1 billion from its refining business, and that is $1 billion that BP did not make.

Krizner: Now at the same time, Shell is being pressured by a couple of pension funds here in the U.S. — and we should also point out that they are not only pressuring Shell, but some other international energy companies as well — to sever ties with Iran. How problematic could this be for Shell going forward?

Mortished: Well, I would speculate that it probably won't be enormously problematic for them. Their main problem is actually whether or not they can make money out of this business, because the Iranians don't want to offer them the sort of profits that they'd like to have.

I think what Shell will probably do is will carry on talking to the Iranians and try to secure a deal where they think they can make money. Then, they will sit down with people in Washington, explain to them what they're trying to do and see whether they can swing it. Obviously, they would never do anything to jeopardize their American business — it's far to important for them. As I mentioned earlier, they made an extra billion dollars selling gasoline to the Americans.

Krizner: Carl Mortished is international business editor for The Times in London. Carl, thanks very much for speaking with us.

Mortished: Thank you.

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