Shell gloomy on EU growth as profits rise

 
Kasmira Jefford
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ROYAL Dutch Shell is more worried about Europe’s competitiveness than the macroeconomic effects of the sovereign debt crisis, the oil giant said yesterday, warning that it is likely to keep reducing its support of projects the region.

Chief financial officer Simon Henry said Shell’s investment in European projects had been cut to only 15 per cent of the company’s total annual investments and this proportion is likely to drop further.

“Fundamentally, we have more of a concern in Europe as a whole about competitiveness. Europe’s macroeconomic position can only recover and the sovereign debt crisis can only be addressed through underlying economic growth,” he said.

“We do not see the European Union creating the conditions for that, in fact quite the opposite.”

Henry’s comments came as the group reported it had doubled its third-quarter profits to more than $7bn (£4.4bn) third quarter of this year, boosted by high oil prices. Brent crude averaged $113 a barrel, up 48 per cent on the same quarter in 2010.

Shell saw overall production, excluding divestments, rise by two per cent compared with the same period last year at 3.01m barrels of oil per day, helped by its oil sands project in Canada and its liquefied natural gas scheme in Qatar.

Shell said the third quarter payout will continue at 42 US cents per share. The group closed up 27p at 2,280p.