Royal Dutch Shell reported third quarter core earnings of $5.8 billion, ahead of expectations, with both its upstream and downstream business segments performing well.
The oil giant also announced that Charles Holliday, the former chairman of Bank of America, has been appointed as the company’s new chairman.
Holliday will be replacing Nokia Jorma Ollila, formed head of Nokia, in 2015.
Royal Dutch Shell has recovered over this year through divesting assets and an increase in production in West Africa and the Gulf of Mexico.
However, its earnings for the third quarter were less than the previous quarter, partly due to weak oil prices and less oil production.
Third quarter oil and gas production slipped by 5 percent versus the year before, producing 2.79 million billion barrels of oil equivalent per day.
Cash flow from operating activities for the third quarter was $12.8 billion, versus $10.4 billion in the same quarter last year. Everything people do in a company that generates revenue is an operating activity.
According to the earnings report by Shell:
“A third quarter 2014 dividend has been announced of $0.47 per ordinary share and $0.94 per American Depositary Share (“ADS”), an increase of 4% compared with the third quarter 2013.”
Chief Executive Ben van Beurden said:
“The recent decline in oil prices is part of the volatility in our industry. It underlines the importance of our drive to get a tighter grip on performance management, keep a tight hold on costs and spending, and improve the balance between growth and returns,”
“Our results today show that we are delivering on the three priorities I set out at the start of 2014 – better financial performance, enhanced capital efficiency and continued strong project delivery.
We have moderated our spending on growth and accelerated disposals of our non-strategic portfolio as part of a drive to improve capital efficiency. Proceeds from asset sales so far this year total $11.6 billion, with further disposals ongoing.”
Crude prices have dropped by almost 25 percent over the last few months, down to $85 a barrel (a four year low), because of weak demand, especially in China.
Shell set a goal to divest $15 billion in assets this year, which it has nearly achieved. In the third quarter the company divested $1.6 billion in the upstream and $2 billion in the downstream.