By SAM FLEMING
Last updated at 9:11 PM on 29th April 2009
Oil prices may not bounce back for 12 to 18 months, Royal Dutch Shell warned after a sharp fall in profits.
Profit warning: Royal Dutch Shell says it could be another 12 months before oil price bounce back
First-quarter earnings tumbled 58 per cent to £2.2billion after oil prices more than halved.
Demand may fall further because of the mounting recession, said chief financial officer Peter Voser, who replaces Jeroen van der Veer as chief executive this summer.
‘In the near-term, the next 12 to 18 months, it’s difficult to see an uptick in the oil or gas price,’ he said.
‘It will take time for the economy to recover, and hence the oil and gas price will be affected.’
Industrial demand for gas is particularly depressed, said Shell. Brent crude yesterday traded a shade under $50 a barrel – a far cry from highs near $150 last year.
The drop in the oil price pushed Shell’s Canadian oil sands venture into the red, forcing it to delay investments and consider axing workers. Like rival BP, Shell is being forced to ratchet up borrowing to sustain dividends.
It hiked raised the first-quarter payout by 5 per cent to 42 cents a share (28.5p). The ‘A’ shares rose 26p to 1,566p.