Thursday November 05, 2009

Shell cuts 5000 jobs as 2009 Q3 profits down 73%, hit by falling oil prices

news.yahoo.com [1] [2] :

Shell, Europe's largest oil company by market value, said it was cutting 5,000 jobs to tackle the tough economic environment. Shell said 2009 Q3 net profits fell 73%, hit by falling oil and gas prices and refining margins, and Shell CEO Peter Voser warned of a slow recovery, amidst renewed fears the global economic recovery may be more protracted than thought, which could weigh on crude oil prices. Excluding one-off and non-cash items, Shell's 2009 Q3 profits came to $2.62 billion. Voser said his restructuring program was yielding results with operating costs lowered by $1 billion in the first nine months of 2009. Oil and gas production for the quarter was 2.93 million barrels of oil equivalent per day (boepd), flat on the same quarter of 2008.

- With the latest crude oil prices testing the $80 support/resistance level, and the Peak Oil factor that is usually left out of most discussions, it would be a challenge for oil majors like Shell to grow their oil and gas production volume which would in turn lead to the record-breaking profits of yesteryear. Sure, falling gas prices are welcome by most consumers but the flipside of the argument is that oil & gas companies have even less incentive to go out and search for new fields, which, as the peakoilers have been arguing, will lead to an even bigger crisis just as we are hitting the downside of the Hubbert Curve.

The crude oil price today may be $80 or thereabouts, but what society needs right now, believe it or not, are *rising oil prices*, in order to accomplish two things : a. to encourage consumers to move towards efficiency and alternative energy sources (such as the trio of solar, wind and nuclear), and b. to encourage producers to continue to put in the necessary investment to explore for new oil and gas reserves in order to tide us over the peak oil transition period.

See also :

1. Shell 2Q2006 profit rises 36% to $6.3 billion, but production falls
2. Shell posts record $25.4 billion profit
3. NYMEX crude oil falls more than $100 from Jul 2008 record on US recession, OPEC production cut delay
4. NYMEX crude oil recovers from $32.40 low after 2.2 mbpd OPEC production cut announced
5. NYMEX crude oil prices hit $80, gold prices trade near $1070.80 record high

(2009-11-05 07:40:05 SGT) [Energy] Permalink

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