Royal Dutch Shell’s profits fell 6pc in 2012, to $27bn (£17bn) as fourth-quarter earnings significantly undershot expectations due to a surprise slump in exploration and production profits.
The Anglo-Dutch oil giant’s chief executive Peter Voser insisted it was on track despite “headwinds” in the past year and the company expected to implement a 4.7pc dividend increase in the first quarter of 2013.
Fourth quarter net earnings came in at $7.3bn, a 13pc rise. Excluding one-off gains of $1.7bn for items such as asset sales, the fourth quarter earnings were $5.6bn, a 15pc rise but significantly below the $6.3bn that analysts had expected.
In Shell ’ s ‘upstream’ exploration and production business, profits fell 14pc to $4.4bn, despite a 3pc increase in oil and gas production.
It also said that profits had been hit “lower liquids and synthetic crude oil realisations in the Americas, which incurred a loss”. In particular the prices it received for its “synthetic crude oil” production in Canada were 19pc lower than in the same period last year.
Shell made no mention of a series of setbacks that afflicted its highly controversial drilling campaign in the Arctic in 2012. However, it listed the Arctic within a series of “future opportunities” in which it expected to spend a total of $4bn in 2013.
Mr Voser said: "With the first year of our 2012-2015 growth targets completed, Shell is ontrack for plans we set out in early 2012, despite headwinds last year.
"Shell is competitive and innovative. We are delivering a strategy that others can't easily repeat, with unique skills in technology and integration and a worldwide set of opportunities for new investment".
The earnings are given on a ‘current cost of supply’ basis, the oil industry standard to strip out the changes to the value of the oil inventory.
Shell said its dividend for the first quarter of 2013 was expected to be 45 cents, an increase of 4.7pc on the same quarter of 2012.