Royal Dutch Shell’s second quarter 2007 earnings, on a current cost of supply (CCS) basis, were $7.6 billion compared to $6.3 billion a year ago. Basic CCS earnings per share increased by 22% versus the same quarter a year ago.
• From 2007 onwards the Group is declaring its dividends in US dollars rather than in euros. A second quarter 2007 dividend has been announced of $0.36 per share, an increase of 14% over the US dollar dividend for the same period in 2006.
• $0.9 billion or 0.4% of Royal Dutch Shell shares were bought back for cancellation during the quarter.
Royal Dutch Shell Chief Executive Jeroen van der Veer commented: "We have delivered another set of competitive results, driven by operating performance. Our investment plans are on track. I am pleased with our progress in downstream and on exploration. We are rejuvenating our portfolio, with sustained investment in new legacy assets, as well as disposals, both upstream and downstream. We continue to see competitive growth opportunities based on our technological strengths, by making disciplined capital choices, in an industry landscape of both higher energy prices and higher costs".

Key features of the second quarter 2007
Second quarter 2007 CCS earnings were $7,556 million or 20% higher than in the same quarter a year ago.
Second quarter 2007 reported income was $8,667 million or 18% higher than in the same quarter a year ago.
Exploration & Production segment earnings were $3,301 million compared with $3,999 million in the second quarter 2006. Earnings, when compared to the second quarter 2006, were mainly impacted by lower volumes, tax charges and higher costs, reflecting current industry conditions, partly offset by a divestment gain.
Gas & Power segment earnings were $779 million compared to $513 million a year ago. Earnings, when compared to the same quarter in 2006, reflected higher Liquefied Natural Gas (LNG) sales volumes, LNG dividends and divestment gains which were partly offset by lower European marketing and trading results.
Oil Products CCS earnings were $2,936 million compared to $2,065 million in 2006. Earnings benefited from higher refining margins, improved marketing margins and a divestment gain, which were partly offset by higher operating costs when compared to the second quarter of 2006.
Chemicals CCS earnings were $494 million compared to $348 million in 2006, reflecting improved margins and higher profits from equity-accounted investments, partly offset by higher operating costs.
Cash flow from operating activities was $8.8 billion compared to $7.8 billion in the second quarter 2006. Excluding working capital movements and taxation effects, cash flow from operating activities was $10.0 billion compared to $11.9 billion a year ago (see note 7).
• Total cash returned to shareholders in the second quarter 2007 in the form of dividends and share repurchases was $3.2 billion.
Capital investment for the second quarter 2007 was $5.8 billion and approximately $6.3 billion of proceeds were realised from divestments.
• Return on average capital employed (ROACE), on a reported income basis (see note 3), was 22.8%.
• Gearing (see note 5) was 12% at the end of the second quarter 2007 versus 13.6 % at the end of the second quarter 2006.
As at March 31, 2007, Royal Dutch Shell, through its affiliates, had acquired the remaining shares of Shell Canada, not already owned by the Group, at a total price of some $7.1 billion. As from the second quarter 2007, Royal Dutch Shell’s financial statements include the fully consolidated results of Shell Canada with no minority interest impact.
On April 18, 2007, Royal Dutch Shell completed the divestment to OAO Gazprom of a 50% stake (plus 1 share) in the Sakhalin project in Russia. Royal Dutch Shell diluted its stake in the project from 55% to 27.5% for a total sale price of $4.1 billion. Royal Dutch Shell’s financial statements now include the balance sheet and income statement of Sakhalin Energy on an equity accounted basis (see note 6).