Shell and BP have joined the ranks of peers who have reported higher than expected earnings by making deep cuts in spending in order to cope with an oil price downturn.
Royal Dutch/Shell and BP have reported on Tuesday higher than expected earnings joining the ranks of fellow peers who have gained greater-than-anticipated profit by making deep cuts in spending in order to cope with oil price downturn now in its third year.
Shell’s stocks have risen by 3% following the company’s announcement of having higher quarterly earning than arch-rival Exxon Mobil, the world’s largest listed company by output. Shell had also announced its hope to surpass Exxon over the next few years following the acquisition of rival BG for $54 billion earlier.
In comparison to Shell, BP stocks fell by 3% following a statement that its results according to some financial analysts were boosted by one-off tax gain, meaning that the longer-term profits and ability to pay dividends could still be at risk.
According to Shell’s CEO Ben van Beurden, the oil sector has yet to emerge from troubled waters, however huge cost saving indicate that oil majors have gotten closer to balancing their operations, given today’s prices of $50 per barrel.