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Business

Shell reports 70 percent drop in profits

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Business

Shell reports 70 percent drop in profits

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COMING UP:Shell reports 70 percent drop in profits

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Transcript

00:00:00
>> Big oil's revenues are looking smaller and smaller. After BP's 45% drop in quarterly earnings, Shell is now reporting a 70% dive. Low oil prices, poorer finding profits, and the cost of a billion dollar acquisition are being blamed.>> The R and D, the investment spending, isn't quite bringing around the returns that they have been looking for.
00:00:23
The movement with the gas operations is something that we have to certainly keep a very, very close eye upon. But they are just another major company dealing in a market which is very, very tricky at the moment, and they're likely to see a lot of margins moving forward.
00:00:37
>> Shell has severely suffered from the global oil glut. In May, it said 12,000 jobs will go by the end of the year, and billions of dollars worth of assets will be sold. Oil has seen a small resurgence, but there are signs prices could hit the bottom of the barrel again.
00:00:55
>> One in nine barrels of gasoline are used in the United States, and the driving season that we've seen there has been quite weak. As we move into the autumn, that demand is likely to continue to remain quite weak as well. So, you'd have to say, in the grand scheme of things, there's a lot of things working against higher prices at the moment.
00:01:15
>> Two oil companies are bucking the trend, though. France's Total posted an increase in quarterly profits. It says it's hit cost saving targets earlier than hoped. Spain's Repsol also reported a rise in profits, on a stronger performance in its upstream operations.