Oil giant Royal Dutch Shell has announced record profits for a UK company of £12.93 billion sterling today. The figure - which equates to almost £1.5m an hour - was up nearly a third on last year, when it set a UK record with profits of £9.8 billion.
It follows a year in which the cost of crude jumped from below $45 a barrel to hit a new record above $70.
Shell made £3.04 billion in the last quarter of its financial year, against £2.94 billion in the same time last year. The group said it expected to use some of the windfall to return up to £2.82 billion to investors through share buybacks in 2006.
The bulk of Shell's profits come from its upstream business - getting oil and gas out of the ground. This division has been boosted by the spiralling cost of crude oil, which rose sharply last summer on tensions in oil-producing countries and a particularly bad hurricane season in the Gulf of Mexico.
Those storms also disrupted Shell's production, shutting refineries temporarily and forcing it to spend significant sums on repairs.
'Our good performance in the fourth quarter of 2005 gives us a solid platform to build on in 2006,' commented CEO Jeroen van der Veer said.
Shell said its reserves replacement ratio - which measures how successfully it replaces oil pumped out of the ground with new reserves - was expected to be in the range of 60% to 70% for 2005, on an underlying level. This measure is closely watched by analysts after last year's grim news of successive reserves downgrades, which sent the figure down to 15% to 25%.
Shell's results today come after Texas-based oil giant Exxon Mobil kicked off the oil reporting season with profits of £19.2 billion in its last financial year - the biggest surplus yet in corporate history.
UK rival BP is also due to report full-year figures next week, with analysts pencilling profits before exceptionals of around £12.2 billion.
