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Shell announced another big cut in oil reserves, but also announced record profits and it will pay out $10 billion in dividends.

According to a Reuters article,

"Surging oil prices and strong refining margins enabled Shell to report fourth-quarter profits of $5.127 billion on a current cost of supply basis, the measure preferred by analysts.

Full-year profits by this measure were $17.59 billion, or $18.54 billion on a historical-cost basis. Analysts said both figures exceeded any profit ever recorded by a UK-listed company, which Tony Woodley, General Secretary of the Transport and General Workers Union, said argued for the introduction of a windfall tax to curb excessive profits in the oil sector."

The oil group is merging its Dutch and British holding companies in an effort to restore confidence in investors.

Last year was "a year of extremes, with the reserves re-categorisation on one hand and record net income and cash generation on the other," stated Chief executive Jeroen van der Veer. "We have taken the steps necessary to close out the reserves issue, made substantial improvements to our portfolio and are reshaping the organisation..

"We expect to pay out at least 10 billion dollars in dividends in 2005 and will relaunch our share buyback programme. The proposal to create Royal Dutch Shell reflects our commitment to regain our competitive strength," he said.

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