Shell Earnings Fall 62% on Oil Price Decline

Updated from 3:06 a.m. EDT AMSTERDAM -- Europe's largest oil company Royal Dutch Shell (RDS.A Quote) reported first-quarter net profit of $3.49 billion (2.65 billion euros), down 62% as oil prices fell sharply.

The net profit figure compares with $9.08 billion in the same period a year earlier.

The company's results are dominated by its production arm, which reported a 67% fall in earnings to $1.7 billion. Both oil production and sales prices fell.

Shell said it pumped 3.4 million barrels of oil and equivalents a day, a 3% fall, because of quota restrictions by OPEC and attacks on its facilities in Nigeria.

Shell's average selling price was $42.16 a barrel, down from $90.72 a year ago.

Despite the actual fall, "underlying production, compared to the first quarter of 2008, increased by some 200,000 barrels of oil per day," Shell said in a statement. It attributed the "underlying" increase to production from new fields and increased production at fields opened in recent years.

The company's second largest business, refining, earned $1.40 billion, down from $2.37 billion a year earlier. Shell said that was because of a combination of lower volumes and worse margins. Margins improved in Asia and the U.S. West Coast, but were worse in Europe and the U.S. Gulf Coast, which are larger markets for Shell.

The company said Wednesday it planned to pay a dividend of 42 cents a share in the first quarter, an increase of 5%.