Exxon and Shell see profits boosted by high oil prices

BBC

Exxon plans to invest up to $37bn over the next five
years developing new energy supplies

Two oil firms - Exxon Mobil and Royal Dutch Shell - have reported big rises in first quarter profits thanks to higher world oil prices.

Texas-based group Exxon generated profits of $10.7bn (£6.4bn), up 69% on last year.

Anglo-Dutch firm Shell reported profits of $6.9bn on a current cost of supply basis, up 41% on last year.

It comes as US crude oil futures rose to their highest level in two-and-a half years at $113.70 a barrel.

Brent crude was trading up 58 cents at $125.71 a barrel.

Oil companies are "really benefiting from the huge jump in crude oil prices", Joshua Raymond, a market strategist at City Index in London, told the BBC.

"If you compare it from Q1 this year to Q1 last year, you're looking at above a 30% jump [in price]."

West Texas Intermediate Crude Oil Futures  $/barrel

Exxon said it had spent $7.8bn during the three month period on developing new energy supplies.

The firm also said its shareholders had benefited to the tune of $7bn in first quarter dividends.

"Exxon Mobil's earnings reflect continued leadership in operational performance during a period of strong commodity prices," said Rex Tillerson, the company's chairman.
Natural gas

Shell said cost saving measures as well as higher oil prices had contributed to its profitability in the first quarter.

Shell is also one of the world's major suppliers of liquefied natural gas (LNG).

The firm said it had started commercial production at its Qatargas 4 LNG facility.

As a consequence of the earthquake and tsunami in Japan, demand for LNG is expected to increase as nuclear power there is scaled back.

On Wednesday, BP reported first quarter profits of $5.5bn, down slightly from the same period last year.

Its production in the quarter was down 11% after BP sold assets to help pay for the cost of cleaning up last year's oil spill in the Gulf of Mexico.