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Shell hit by falls in oil price

Oil giant Royal Dutch Shell has posted a sharp fall in quarterly profits after

the price of oil slumped dramatically towards the end of last year.

Profit for the final three months of 2008 fell to $4.8bn ( 3.4bn), down 28%

from the same period a year ago and 56% lower than the previous quarter.

But annual profits at the Anglo-Dutch company rose 14%, to $31.4bn, helped by

record oil prices over the summer.

Oil prices hit $147 a barrel in July 2008, but are now below $50.

Shell boss Jeroen van der Veer described the fourth quarter results as

"satisfactory", given the fall in demand for oil and the weakening global

economy.

"Our strategy remains to make significant investments in the company for future

profitability. Industry conditions remain challenging, and we are continuing

the focus on capital and cost discipline at Shell," he said.

Oil and gas production in the fourth quarter was virtually unchanged from the

same period in 2007, at 3.4 million barrels a day.

Full-year production was slightly down on the previous year.

"These are not top draw results from Shell," said Keith Bowman at Hargreaves

Lansdown.

"All in all, despite enviable cash flows and low borrowing levels, Shell, as

with industry in general, is suffering under the weight of global economic

decline."