Business Insight Zone

Breaking from the pattern of lower earnings reported by BP and Exxon Mobil* earlier in the week, Royal Dutch Shell said that its earnings rose nearly 20% during the second quarter of 2007. While it had problems with unrest around its holdings in Nigeria, it benefited from strong performance in its refinery operations.

Shell suffered some real setbacks in recent years, including a scandal about misreporting its oil reserves and losing control of a $20 billion oil and gas project on the Russian island of Sakhalin — a project that the Kremlin basically took from Shell and handed to Gazprom. (Several big oil companies went through something similar this year when Venezuela nationalized some of their assets, a development that particularly hurt Conoco’s earnings.)

It will be interesting to see how Shell does going forward. It is staking its success on improved use of technology — which helps to explain why Nokia’s former CEO Jorma Ollila is now Shell’s chairman — along with big projects in alternative energy. It seems clear that Shell wants to be a technology-driven energy company rather than an oil company per se.

~

* Don’t shed a tear for Exxon: they still cleared more than $10 billion for the quarter.

Category: Energy