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Shell reports record $25 bln profit

Oil giant Royal Dutch Shell has reported record annual profits of $25.36 bln for 2006.

Strong operations in the US and growth in deep water gas production off Nigeria helped boost the fortunes of Europe's second-biggest oil company. Shell's surging annual earnings meant the Anglo-Dutch giant generated earnings of almost £1.5 million (€2.26 million) an hour. However, analysts warned that the current year could be tougher for Shell following a fall in the price of oil. The company added that it was continuing to deal with „major security related concerns” in Nigeria's Delta oil producing region, where attacks on pipelines have knocked production. Oil production in the troubled region was down 191,000 barrels on the previous year.

The company also saw the loss of key interests in its Russian Sakhalin-2 oil and gas project to Russian energy giant Gazprom, following intense political pressure from the Kremlin Shell's results were lifted by strong Q4 current cost of supply profits, which rose 11% to $6 billion. Shell said output during the final quarter reached 3.645 million barrels of oil equivalent a day, compared with 3.5 million a year ago. „In 2006, we saw good operational and financial performance in Shell. Our exploration strategy is paying off, „ said CEO Jeroen van der Veer. „Hydrocarbon production was underpinned by the production re-start from the Mars platform in the US, growth in LNG and deep water Nigeria.” Van der Veer added: „We have agreed to partner with Gazprom in Sakhalin-2, and are progressing with the proposal to acquire the minority shareholding in Shell Canada”. (BBC NEWS)