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Shell Posts Record Annual Profit | Oil Watchdog

Press Release

Shell Posts Record Annual Profit

CONTACT:

Thu, Jan 31, 2008 at 11:02 am

    Shell Posts Record Annual Profit

    NEWS RELEASE
    January 31, 2008

    CONTACT: Judy Dugan, 310-392-0522, ext. 305, cell: 213-280-0175; or Jamie Court, ext. 327, cell: 310 874-9989

    Shell’s Record Profit Is a Thumb In the Eye of Recession-Wracked Nation, Says Group;

    Yearly Profits of Industry Will Nearly Equal Treasury Cost of Federal Economic Stimulus Package

    Santa Monica, CA — The record run of 2007 oil profits, which came
    as the U.S. economy slid into recession and consumer debt soared,
    portrays an industry run amok, said the Foundation for Taxpayer and
    Consumer Rights. Shell, world’s second-largest oil company, racked up a
    corporate record $27.6 billion annual profit in 2007 ($31.3 billion on
    straight net).

    While Shell may have slightly "missed analysts’ estimates,"
    it’s profit figures show that integrated oil companies continue to find
    ways to increase profits even as the economy falls. In Shell’s case,
    the company replaced the refining profits of recent years by escalating
    income from selling crude oil, often to their own refiners, said the
    nonprofit, nonpartisan FTCR. Consumers and economies continue to suffer
    the result.

    Shell’s yearly profit will be exceeded tomorrow by ExxonMobil,
    whose profits are thought likely by analysts to top last year’s $39
    billion total.

    "With motorists paying $63 for a 20-gallon fill-up in
    California and Northeasterners shelling out more than $2,000 on average
    this season for heating oil, it’s no stretch to expect a family’s whole
    federal "economic stimulus" payment this spring to go to energy-related
    debt on their credit cards," said Judy Dugan, research director of FTCR
    and it’s OilWatchdog.org
    project. "The cost of the current stimulus package, estimated at about
    $117 billion in extra national debt, is little more than the yearly
    combined profit of the major oil companies."

    While the housing collapse may have triggered recession, energy prices have deepened and will likely lengthen it, said FTCR.

    "Oil and fuel prices are a cost everywhere in the economy, from
    $300-plus fuel surcharges on airplane flights to Asia, to the price of
    breakfast cereal," said Dugan. "Petroleum prices increase fertilizer
    costs, and the trucker that delivered the cereal added a fuel
    surcharge."

    Economists have looked with worry at the Federal Reserve’s
    interest rate cuts, because oil prices have driven inflation even as
    the rest of the economy sagged, noted FTCR. Rate cuts and the federal
    stimulus package could push the economy toward the worst case,
    stagflation, largely because of energy costs.

    "Government turns a blind eye to wildly speculative crude oil
    markets and record oil profits, while oil companies continue to receive
    billions in tax subsidies," said Dugan. "These subsidies come from the
    pockets of taxpayers and their children as federal debt soars."

    Despite the U.S. economic slump, rising oil stocks and weak
    demand, the price of crude oil remains around $90 a barrel. This is
    largely due to the pressure of unregulated speculation, said FTCR.

    FTCR has called for oversight of unregulated electronic energy
    trading markets and of oil company refining operations, including
    investment in new capacity and updating of aged, unreliable refineries.

    – 30 –

    For more information, see: www.ConsumerWatchdog.org and www.OilWatchdog.org

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