Shell is expected to report huge annual profit gains as oil prices recover
Royal Dutch Shell's annual profits are expected shoot up following last year's dramatic 80 per cent decline as oil prices continue to inch up.
The oil giant is forecasted to post a profit of $8.17bn (£6.51bn), more than double its profit of $3.8bn the previous year, the Telegraph reported.
The Anglo-Dutch business is also expected to announce the latest development in its drive to ditch $30bn worth of assets following its £35bn takeover of BG Group. Shell is predicted to report the $3bn sale of its North Sea oil and gas assets – almost half of its total assets worth $7bn in the North Sea – to a private-equity-backed explorer.
Read more: Shell swings to profit but remains cautious on low oil prices
Jefferies oil market analyst Jason Gammel told the Telegraph its clear oil companies have reached a turning point as crude prices recover.
At their low, prices were below $30 per barrel, but they now sit around $55 per barrel and are expected to reach $60 by the end of 2017.
By next year, as improvements to both oil price and operating and capital efficiencies take shape, the sector will be generating the same cash flow as it did in 2013 when oil prices were nearly $110, Gammel said.
Shell will report its results on Thursday 2 February, followed closely by BP, Exxon Mobil and Total, which are expected to post similar profit boosts in the coming weeks.