Chart Source: StockCharts

Royal Dutch Shell remains behind the curve in its re-organization efforts, relative to British Petroleum. The energy producer's management have acknowledged more work is required and is to cut a further 5,000 jobs globally in an effort to re-align the business to better meet the operational challenges into the global economic recovery.

Royal Dutch Shell's third quarter 2009 earnings, on a current cost of supplies (CCS) basis, were $2.99 billion compared to $10.9bn a year ago. Basic CCS eps (earnings per share) decreased by 72% versus the same quarter a year ago. Cash flow from operating activities also slumped 42% in Q3 2009 relative to Q3 2008 from $12.6bn to $7.35bn.

Upstream earnings were particularly weak at $1.54bn (Q3/09) compared to $8.65bn (Q3/08) reflecting lower oil and gas prices. Q3/09 production was 2,926 thousand boe/d (barrels of oil equivalent a day) compared to 2,931 thousand boe/d a year ago. Crude oil production was down 2% and natural gas production increased by 3% compared to the third quarter 2008.

Shell's Chief Executive Officer Peter Voser commented "Our third quarter results were affected by the weak global economy. Upstream and Downstream profitability has been sharply reduced compared to year-ago levels. We see some indications that energy demand and pricing are improving, but the outlook remains very uncertain, and we are not expecting a quick recovery. Despite Shell's good operating performance in this difficult environment, we have embarked on an ambitious programme of stringent measures to further improve our performance."

Despite the challenges ahead Shell remains committed to distributing a good proportion of its profits to shareholders and total dividends paid during the third quarter 2009 were $2.7 billion.

British Petroleum (BP)

Chart Source: StockCharts

Despite the sharp fall in Q3 earnings investors were greatly encouraged by BP's quarterly report and shares in the energy group rallied strongly after the latest data was released.