ROYAL Dutch Shell has underlined the impact of oil price movements on its profitability amid continued volatility in the market.
In an update on trading the oil and gas giant said the amount of cash it generates from operations annually will vary by $6 billion for every $10 per barrel movement in the price of Brent crude.
Read more: Former Faroe Petroleum boss set to return to fray
The update follows a period during which the Brent crude price has fluctuated within a $30/bbl band.
While the price has increased in response to political tensions in the Middle East concerns about the outlook for the global economy have weighed on sentiment.
The boom in production in US shale areas has offset efforts by exporters led by Saudi Arabia to curb production to support prices.
Crude price volatility has created complications in the North Sea as the industry emerges from the downturn triggered by the sharp fall in the oil price since 2014.
Read more: Shell boss hails 'huge step up' in North Sea performance
However, a range of firms have approved North Sea developments in recent months, including Shell.
Yesterday private equity-backed Neptune Energy said work on the development of the Seagull field off Scotland has been progressing at pace. The project was approved in March.
Neptune is developing Seagull with BP, whose chief executive Bob Dudley is reported to be preparing to retire after 10 years in charge.
Brent reached a four year high of $85/bbl in October but fell to $53/bbl in January. Brent crude sold for around $61/bbl yesterday.
The trading update was the first issued by Shell in addition to its quarterly results announcements.
Chief financial officer Jessica Uhl said Shell issued the update in response to feedback from investors.
“This is a further step in Shell’s ongoing journey to enhance disclosures and increase transparency,” said Ms Uhl.
Shell said third quarter production is expected to be between 2.6 million and 2.65m barrels of oil equivalent per day.
The company made no mention of its North Sea business in the update.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here