Profits strong at Exxon Mobil, Shell amid new projects

Exxon Mobil’s earnings were a bit lower than analysts had expected, despite strong revenue growth, reflecting a record $10.3 billion in capital and exploration expenditures in new oil and gas projects, up 58 percent from the second quarter of 2010.

It was the strongest quarter for Exxon Mobil since it set a corporate quarterly earnings record of $14.8 billion in 2008, when crude oil prices approached $150 a barrel before collapsing as the world economy slowed.

The strong profits reported by the largest oil companies of the United States and Europe followed the strong results posted by ConocoPhillips and a number of other independent oil companies and oil service companies in recent days.

The industry is investing heavily in US oil and gas projects in shale fields, gradually shifting to oil because of the high price of crude and lagging price of gas. Oil prices rose more than 30 percent during the quarter, mainly because of political disruptions in North Africa and the Middle East, while natural gas prices rose less than 1 percent.

But even with low gas prices, Exxon Mobil, Shell and other energy firms are continuing to buy prospective fields in the United States, Europe, Argentina, and elsewhere, and overall gas production is still rising after a decade of strong increases in output.

Shell started two projects in the first half of the year in Qatar and expanded its Canadian oil sands operation. The Qatargas 4 liquefied natural gas project is now at full capacity and the new Pearl gas-to-liquids operation has started producing, Shell said. The projects are expected to contribute more than 400,000 barrels of oil equivalent per day in peak production, it said.

Exxon reported earnings of $10.7 billion, up from $7.56 billion and revenue of $125.49 billion, up from $92.47 billion. Shell profit rose to $8.7 billion from $4.4 billion.