The commercial start-up of a new liquefied natural gas (LNG) plant in Qatar has helped Royal Dutch Shell to limit a drop in production due to asset sales while improving its first-quarter earnings by 60 per cent.
Europe's biggest petroleum group reported net profit for the first three months of this year of US$8.78 billion (Dh32.24bn), up from $5.48bn for the same quarter last year. It attributed the increase to higher oil prices, gains on asset sales and improvements in its refining operations.
Rival ExxonMobil also reported surging earnings yesterday as first-quarter net profit advanced to $10.7bn from $6.3bn a year earlier - its fifth consecutive quarterly profit rise.
Shell's earnings for the first quarter of this year included a $1.12bn net gain on sales of oil and gas assets and a $483 million charge related to asset impairment in its refining business.
Without one-off items, Shell's earnings for the period were $7.14bn, up from $5.4bn in the first quarter of last year.
"Our first-quarter 2011 earnings have risen from year-ago levels, driven by higher industry margins and our own operating performance," said Peter Voser, the chief executive of Shell.
The company said it started commercial production at two new projects during the quarter, including the Qatargas 4 LNG joint venture with Qatar Petroleum, in which it holds a 30 per cent interest.
When operating at capacity, the plant is expected to process 1.4 billion cubic feet per day of Qatari gas to yield 7.8 million tonnes of LNG a year and 70,000 barrels per day (bpd) of gas liquids.
In the Netherlands, Shell this year pumped its first oil from the Schoonebeek enhanced oil recovery project. Oil and gas output from the field is expected to reach 20,000 barrels of oil equivalent per day (boepd).
Shell's total first-quarter oil and gas production fell 3 per cent to 3.5 million bpd, compared with the same period last year. The combined output from properties still in its portfolio at the end of the period was flat, the company said.
"New field start-ups and the continuing ramp-up of fields contributed to the production in the first quarter by some 230,000 boepd, in particular from the ramp-up of Gbaran Ubie in Nigeria, the start-up of the Qatargas 4 project in Qatar, and the ramp-up for the Jackpine mine at the Athabasca oil sands project in Canada, which more than offset the impact of field declines," Shell said.
The Canadian project involves exploiting a huge deposit of grit mixed with bitumen, a type of solidified crude oil, in one of the world's largest open-pit mining operations. The tarry mixture is stripped of sand and processed into synthetic light crude, which is shipped to conventional refineries for further processing.
Shell also posted a 4 per cent increase to 4.42 million tonnes in first-quarter LNG sales, reflecting higher volumes from its gas liquefaction projects in Nigeria and on Russia's Sakhalin Island, as well as the start-up in Qatar.
In its oil-refining operations, Shell's profit margins improved after the sale of certain US assets. In further efforts to improve profitability, the company recently agreed to sell most of its refining and marketing operations in Africa and Chile, and its Stanlow refinery and associated marketing business in the UK, in deals totalling almost $3bn.
It has also proposed converting a small Australian oil refinery and terminal into a fuel import terminal.
tcarlisle@thenational.ae
Company%20Profile
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Brief scoreline:
Tottenham 1
Son 78'
Manchester City 0
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
As You Were
Liam Gallagher
(Warner Bros)
COMPANY%20PROFILE
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The%20specs
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The%20Kitchen
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Company Profile
Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
Company%20Profile
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Company Profile:
Name: The Protein Bakeshop
Date of start: 2013
Founders: Rashi Chowdhary and Saad Umerani
Based: Dubai
Size, number of employees: 12
Funding/investors: $400,000 (2018)
The specs
Engine: 1.5-litre 4-cylinder petrol
Power: 154bhp
Torque: 250Nm
Transmission: 7-speed automatic with 8-speed sports option
Price: From Dh79,600
On sale: Now
THE SIXTH SENSE
Starring: Bruce Willis, Toni Collette, Hayley Joel Osment
Director: M. Night Shyamalan
Rating: 5/5
Who are the Soroptimists?
The first Soroptimists club was founded in Oakland, California in 1921. The name comes from the Latin word soror which means sister, combined with optima, meaning the best.
The organisation said its name is best interpreted as ‘the best for women’.
Since then the group has grown exponentially around the world and is officially affiliated with the United Nations. The organisation also counts Queen Mathilde of Belgium among its ranks.
COMPANY%20PROFILE
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COMPANY%20PROFILE
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COMPANY%20PROFILE%20
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