Shell profits show sharp decline

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Anglo-Dutch oil giant Royal Dutch Shell has reported its quarterly profit fell sharply, and warns the outlook remains "very uncertain".

The company said profit for the three months to September fell 73% to $3bn (£1.8bn) from a year earlier.

"We are not expecting a quick recovery," Shell chief executive Peter Voser said.

BP, its UK rival, this week reported its third-quarter profits were well ahead of expectations.

Oil prices

Global crude prices hit a record $147 a barrel last year, before falling back as the world recession took hold.

US light crude is currently at $77 after a big drop this week.

Shell said its oil and gas production for the third quarter was 2.9 million barrels of oil equivalent per day, similar to the same quarter last year.

"We see some indications that energy demand and pricing are improving, but the outlook remains very uncertain," Mr Voser said.

The company said it had reduced costs by $1bn in the first nine months of the year.

Beating expectations

Europe's biggest oil firm also said net profit was $3.25bn, compared to $8.45bn in the same quarter a year ago.

That beat analyst predictions of about $2.4bn.

Meanwhile, sales fell 43% to $75bn.

Shell said its cost reduction programme -started earlier this year - will see 5,000 employees leave Shell in 2009, representing a 10% cut in those divisions.

"Our strategy remains on track, although the near-term industry outlook remains challenging," Mr Voser added.

US competitors Exxon Mobil, the world's largest oil company, and Chevron will also report their results this week.