Price of oil burns Shell profits

Royal Dutch Shell has announced a 28 per cent fall in year-on-year profits for the last quarter due to a slump in oil prices.

The oil giant said final quarter profits stood at $4.8 billion, 56 per cent lower than the preceding three months.

Despite the fall, however, annual profits still rose year-on-year to $31.4 billion.

The group's chief executive Jeroen van der Veer said Shell had delivered a "satisfactory" performance given the demand for oil and gas against the backdrop of a weaker economy.

"Our strategy remains to pay competitive and progressive dividends, and to make significant investments in the company for future profitability," he said.

"Industry conditions remain challenging, and we are continuing the focus on capital and cost discipline in Shell."

At the height of the oil price boom in July 2008, barrels were selling at $147, although the current price is a now less than a third of last summer's.