Royal Dutch Shell plc has announced upstream earnings of $6,178 million for the fourth quarter of 2012, a 6% fall from $6,565 million in the fourth quarter of 2011.
It also saw a 9% drop in full year earnings from $24,455 million at the end of 2011 to $22,162 million at the end of 2012.
Earnings were lower than in the fourth quarter 2011 mainly due to increased operating expenses, higher depreciation and higher exploration expenses, says Shell. Earnings were also impacted by lower liquids and synthetic crude oil realisations in the Americas, which incurred a loss.
The supermajor’s upstream cash flow from operating activities also dropped 5% year-on-year from $6,845 million in Q4 2011 to $6,164 million in Q4 2012.
But the company continued to invest heavily in its upstream sector this quarter, with a net capital investment of $9,323 million, a 27% increase from $7,363 in Q4 of 2011. Capital investment for the 2012 year rose even more steeply, by up to 33% to $25,250 million from $19,083 million in 2011.
According to the statement from Shell; compared with the fourth quarter 2011, upstream earnings excluding identified items benefited from the contribution of Integrated Gas, reflected the ramp-up of Pearl GTL in Qatar, higher equity LNG sales volumes and realisations as well as increased LNG trading contributions.
“With the first year of our 2012-2015 growth targets completed, Shell is on track for plans we set out in early 2012, despite headwinds last year,” said Peter Voser, chief executive officer.
Fourth quarter 2012 production was 3,414 thousand boe/d compared with 3,305 thousand boe/d a year ago, marking a 3% increase. Liquids production was in line with the fourth quarter 2011, staying at approximately 1,604 boe/d, while the company’s natural gas production increased by 7% from 9,633 boe/d in the fourth quarter of 2011 to 10,288 boe/d in the fourth quarter of 2012.
Liquids production throughout 2012 however, saw a 2% drop while Natural gas production rose 5%.
New field start-ups and the continuing ramp-up of fields, in particular Pearl GTL in Qatar and Pluto LNG in Australia, contributed some 235 thousand boe/d to production in the fourth quarter 2012, which more than offset the impact of field declines.
Equity LNG sales volumes of 5.49 million tonnes were 13% higher than in the same quarter a year ago. Equity LNG sales volumes reflected the contribution from Pluto LNG and higher volumes from Qatargas 4 LNG.
