The cheaper oil prices affect directly the oil companies, which have to focus their efforts in the most profitable fields and develop strategies to adjust the market. The profits of the two leading oil companies, Royal Dutch Shell and Exxon Mobil Corp fell in the first quarter, but these companies found ways to surprise the analytics with higher figures than expected.
Royal Dutch Shell
The net profits of the Royal Dutch Shell oil company fell by 56% in the first quarter, but it exceeded the analysts’ forecast due to oil refining and the trading division.
The company earned $ 3.2 billion and retained dividends of 47% cents per share. The profits from oil refining and trading rose to $ 2.65 billion from $ 1.58 billion of the previous year, and the production unit profits fell to $ 675 million from $ 5.7 billion.
“The results reflect the stability of our integrated business amid the falling oil prices" - said CEO Ben van Burden.
This year, Shell has sold assets for $ 2 billion to keep for itself the most profitable ones. In January, the company announced that within three years it will reduce spending by $ 15 billion in response to the fall in oil prices.
Exxon Mobil Corp
The profits of the US oil company Exxon Mobil Corp (NYSE: XOM) also fell in the first quarter, and in a similar situation with Shell company, the figures are not as low as the analysts had expected.
The profit fell to $ 1.17 per share from $ 2.10, which was a year earlier, and this is with the forecast of $ 0.83 per share. The oil and gas production figures have increased by 2 percent, getting to 4.2 million barrels of oil per day. Refining unit increased profits to $ 1.7 billion from $ 854 million in the first quarter of 2014 due to the foreign operation.
The oil prices at the present time and in future
In the first quarter, the average price of Brent was $ 55 per barrel, which is almost twice lower than the average price a year ago.
The oil prices will remain relatively low for at least another year, the Reuters poll showed. The average annual price of Brent this year will be $ 60 per barrel, showed the survey of 32 analysts, which is $ 0.80 higher than the March forecast.