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AKIPRESS.COM - The European oil giant Royal Dutch Shell reported Wednesday a 45% decline in first-quarter earnings compared with a year earlier, as production fell sharply and the company took a large write-off on its refining business.
Shell, which is based in The Hague, the Netherlands, said it earned $4.5 billion for the quarter compared to $8.2 billion a year earlier, NYTimes said.
The largest earnings impact came from $2.9 billion in write-downs, mostly on the value of Shell’s marketing and refining units in Europe and Asia. Excluding those large one-time factors, earnings were $7.3 billion, down 3 percent from the same period in 2013. That was 48% above analysts' consensus, according to Peter Hutton, an analyst at RBC Capital Markets in London, who called the results "encouraging" in a note to clients. Shell's share price rose about 3 percent in early trading in London.
Oil production fell 9 percent, to an average of 3.24 million barrels per day of oil equivalent in the quarter, compared with last year’s first quarter.
The company said that continued security problems in Nigeria and a government-ordered reduction of gas output in the Netherlands had contributed to the decline. The company said, however, that production had started at its giant Majnoon field in Iraq.
Shell’s exploration and production business reported a slight increase in earnings, as the company’s strong natural gas business performed well, while marketing and refining fell.