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(Updates with exploration comments in 14th paragraph.)
Feb. 2 (Bloomberg) -- Royal Dutch Shell Plc, Europe’s biggest oil company, expects to raise its dividend this year for the first time since 2009 as new projects generate more cash.
Shell plans net capital investment of $30 billion, with cashflow from operations in 2012-2015 expected to be as much as 50 percent higher than in the 2008 to 2011 period.
Chief Executive Officer Peter Voser said growth will be driven by more than 60 new projects, unlocking potential resources of more than 20 billion barrels of oil equivalent. That’s on top of 14 projects started in 2009-2011, including Qatar’s Pearl gas-to-liquids venture.
“Our improving financial position creates an opportunity to increase both our dividends and investment levels,” Voser said today in a statement.
Net income fell to $6.5 billion in the fourth quarter from $6.79 billion a year earlier, The Hague-based Shell said. Excluding one-time items and inventory changes, profit missed analyst estimates.
The Anglo-Dutch company plans to increase the dividend by 2.4 percent to 43 cents in the first quarter from 42 cents announced in the fourth quarter.
Shell is the first of Europe’s biggest oil companies to report earnings. It will be followed by BP Plc on Feb. 7 and Total SA on Feb. 10. Exxon Mobil Corp., the world’s largest energy company by market value, reported fourth-quarter sales that fell short of analysts’ estimates earlier this week.
Shell posted adjusted earnings of $4.8 billion, compared with the $5.2 billion median estimate of 15 analysts surveyed by Bloomberg.
“The overall result represents a substantial undershoot against a consensus which just three weeks ago was above $7 billion,” said Stuart Joyner, an analyst at Investec.
Shell fell 0.2 percent to 2,265 pence in London. The shares climbed 11 percent last year.
U.K. front-month natural gas prices are down about 20 percent since reaching a 2011 high of 67.80 pence per therm on Nov. 7. Milder weather in Europe and maintenance curbed Shell’s production by about 100,000 barrels of oil equivalent in the quarter, according to Sanford C. Bernstein & Co.
Shell will increase production to about 4 million barrels of oil equivalent a day in 2017-2018. Last March, it said daily output would rise to 3.5 million barrels this year and 3.7 million barrels by 2014.
Output fell 5.5 percent to 3.305 million barrels a day in the fourth quarter from the year-earlier period. Full-year production declined 3 percent to 3.215 million barrels a day last year.
The company plans to increase investment in exploration by 35 percent to about $5 billion this year, after raising spending 30 percent to $3.6 billion last year, it said.
Profit was also curbed by maintenance at rigs in the Gulf of Mexico and the North Sea. Shell shut the Bonga field in Nigeria after an offshore oil spill, the nation’s worst in more than a decade.
A fire disrupted shipments from Shell’s Pulau Bukom plant in Singapore, the company’s biggest. The company had a charge of $150 million in the fourth quarter relating to the fire, Voser said.
Shell made a loss of $278 million from its refining and marketing operations, compared with a profit of $482 million a year earlier. Crude processing fell 17 percent as sales dropped.
“We had the perfect storm,” Voser told analysts today. “After the driving season, the demand just collapsed both in the U.S. but also in Europe.”
Refining margins from processing oil into fuels such as gasoline and diesel on the U.S. Gulf coast fell 22 percent to $7.16 a barrel in the fourth quarter from a year earlier, according to BP Plc data.
Shell divested about $7.5 billion in assets last year, including the sale of its 80 percent interest in Pecten Cameroon Co for $500 million to a unit of China Petrochemical Corp. The company expects to dispose producing assets with capacity of about 250,000 barrels of oil equivalent a day between 2012 and 2017, it said today.
Shell is advancing its floating liquefied natural gas technology and has agreed to pay about $900 million to Inpex Corp. to join Indonesia’s Abadi offshore field development project last year. It spent about $700 million on new exploration acreage acquisitions in Russia’s Arctic, Turkey, Canada, Colombia and the U.S. in the fourth quarter.
Last year, Shell signed liquefied natural gas supply agreements worth about $100 billion valued at today’s oil price, the company said.
--Editors: Stephen Cunningham, Torrey Clark.
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