Shell's £1m an hour profit

Shell today unveiled the biggest profit ever made by a British company.

It told the City that it made £9.4billion last year, or around £1 million an hour.

The figure is more than the entire national economic output of countries such as Estonia and Albania.

Profits for the fourth quarter of last year are up by more than 200 per cent on 2003 at £2.7billion.

The record surplus came despite what is described as the worst year in Shell's history when the company was rocked by a scandal over estimates of its oil reserves.

The astonishing profit will trigger new demands for a windfall tax on the big oil companies. While Shell's shareholders have benefited, consumers say they have suffered through sharply higher petrol prices and household energy bills.

Most of the profit is down to the soaring price of crude oil to levels above $50 a barrel. This came as production in regions such as Iraq was disrupted but demand in America, China and India soared. Shell produces about 3.8 million barrels of oil a day.

Oil prices are expected to remain high throughout most of this year after Opec this week agreed to hold production at 27 million barrels a day.

Shell's results come two days after a world record profit from the world's biggest oil company ExxonMobil, which made more than £13 billion in 2004.

Shell is also expected to beat the figure from arch-rival BP next week. BP is forecast to have made about £9 billion in 2004, when chairman Lord Browne described the company's cash flow as "astonishing".

However, Shell's financial performance will remain overshadowed by the events of its "annus horribilis" when its reputation as one of the world's most respected corporations was shattered.

Former chairman Sir Philip Watts and two other senior executives were sacked after the board was found to have misled investors over the size of its reserves.

The fall-out led to a huge restructuring of the company, which suffered fines totalling £83 million.

A survey out this week found that confidence among staff in the way the company is run has slumped over the past year.

Only 47 per cent said they were happy with its leadership compared with 67 per cent in a similar survey 12 months ago. Chief executive Jeroen van der Veer said today: "2004 was a year of extremes, with the reserves re-categorisation on one hand and record net income and cash generation on the other.

"Our performance demonstrates our financial and operational resilience and the quality of our people and assets. We have taken steps to close out the reserves issue, made substantial improvements to our portfolio and are reshaping our organisation."

The company, which reports its results in US dollars, also revealed that it expects to pay out more than £5.6billion in dividends to shareholders in 2005.

The bumper figures are certain to trigger huge multi-million pound bonuses for Shell's new top management-although the exact figures will not be revealed until Shell's full accounts are published in a month's time. Today's results also show that the company paid tax of almost £8 billion last year. Shell's profit, which compares to £6.8billion in 2003, beats the £7.7billion profit made by banking giant HSBC last year.