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Shell beats forecasts, BP trims spending again

Tuesday, November 01, 2016 - 01:44

BP reports a near halving in Q3 earnings and cuts its investment plans by another $1 billion - but beats estimates. And, as Hayley Platt reports, a strong set of numbers from Shell also came in ahead of forecasts

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It was a case of differing fortunes for oil titans Shell and BP. Both beat forecasts in the third quarter. But it was Shell that shone. Net profit for the group came in at $2.8 billion - that's an 18 percent rise. Helped by the acquisition of BG Group at the start of the year - propelling it into the world's top producer of liquefied natural gas. Still it's under pressure from investors to maintain its dividend at a time of persistently low oil prices. BP too suffering from the low oil price environment. Its third quarter earnings almost halving. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "The common thread that runs through both the results, those two big oil majors, are cutting capital expenditures, trying to get control of their cost base, trying to adapt to potentially a world where 40/50/60 dollar a barrel of oil maybe here for much longer than most of those boards had expected." There was some hope of a cut in production after OPEC members agreed to curb output when they met in Algiers in September. But clarity over which countries are going to take the brunt of those cuts is still something analysts want more of. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "It tells us that the sector, at least at a corporate level is not out of the woods yet not by a long chalk." A slight rise in the price of oil should help BP's prices going into next year. But it's still cutting spending this year by another $1 billion dollars to improve margins. It also plans to lay off around 7,000 workers by the end of next year. Shares for both firms quite mixed. BP losing just over 2 percent. While Shell's rose by more than 3 percent. /// I don't see that the OPEC deal that was brokered in Algeria has yet had the clarity over which country's in OPEC are going to take the brunt of that production cut and also the noises where the non OPEC production is indeed going to take any notice of the OPEC countries has agreed. So There were signs oil producers would cut production after OPEC members met last month in Algiers. The problem still to be decided - who will cut and by how much. BP also beating expectations but its results less rosy. It's net income in the third quarter fell to $933 - almost half of what it was at the same time a year ago. Weak oil prices were largely to blame. The group has also been undergoing a costly restructuring. It expects further charges next year. It's also cut its 2016 investment plans by another $1 billion. And plans to lay off around 7,000 workers by the end of next year. results

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Shell beats forecasts, BP trims spending again

Tuesday, November 01, 2016 - 01:44