An Exxon sign is displayed atop a gas station in Carnegie, Pa, on Wednesday, July 27, 2011.Gene J. Puskar/The Associated Press
Oil giants Exxon Mobil Corp. and Royal Dutch Shell PLC said their profits jumped more than 40 per cent in the third quarter as higher energy prices offset declines in their output.
Oil prices have sagged from their May peaks, but still remain well above the 2010 levels. Recent optimism that the global economy may be recovering has sent crude prices climbing 20 per cent this month.
Still, the world's two biggest publicly traded oil companies have struggled to stem a drop in their output, and record spending by Exxon of $26.7-billion (U.S.) for the first nine months of 2011 has not yet turned that trend around.
Exxon's oil and gas output slipped 4 per cent to 4.28 million barrels of oil equivalent per day, lagging Wall Street expectations. Shell's output fell 2 per cent.
"Production was quite a bit lower than we were modelling," Raymond James analyst Pavel Molchanov said of Exxon's output. "It's a recurring theme we've seen from peer companies."
The dip in crude oil prices during the third quarter helped both Exxon and Shell lift their profit margins at their refineries and chemicals businesses, particularly in the United States.
Shell posted a 25 per cent profit increase over year-ago levels at its refineries and chemicals businesses, and Exxon saw its refineries' profits climb 36 per cent.
Those gains, however, lagged the nearly 54 per cent increase Exxon posted from its oil and gas producing arm and the 58 per cent jump in Shell's earnings from that segment.
Shell, Europe's largest oil company by market capitalization, said its underlying current cost of supply (CCS) net income, which excludes one-offs and non-cash accounting charges, soared 42 per cent in the third quarter to $7-billion, while Exxon, the world's largest publicly traded oil company, reported a 41 per cent increase to $10.3-billion.
Occidental Petroleum Corp. , the fourth-largest U.S. oil company said its third-quarter profit rose 49 per cent while daily oil and gas production soared to a record.
Italy's Eni SpA's production fell 13.6 per cent due to the conflict in Libya, while underlying, or "adjusted" net profit, in dollar terms rose 19 per cent.
Norway's Statoil ASA said its adjusted net income rose 50 per cent to $2.07-billion in the third quarter and its production climbed 14 per cent. Still, the company cautioned that its output would fall slightly this year.