Brian Swint London

Royal Dutch Shell’s investment would increase after fourth-quarter profit missed analyst estimates on weaker North American fuel prices, the energy company said yesterday.

Excluding one-time items and inventory changes, profit in the three months to December last year was $5.6 billion (R50bn). That was below the $6.2bn average estimate of 11 analysts surveyed.

Net capital spending of about $33bn this year compares with $30bn last year.

Higher costs of getting oil and gas to production are offsetting gains from rising output and record average Brent crude prices. Chief executive Peter Voser is trying to appease investors by raising the dividend in the first quarter, and he expects to increase output to 4 million barrels of oil equivalent a day in 2017 from 3.3 million barrels last year.

“The 2013 capex is a negative surprise,” Investec Securites analyst Stuart Joyner said. “Spending is set to be higher, for longer.”

Net income rose 3 percent to $6.7bn. Full-year earnings fell 14 percent to $26.6bn.

Shell expects to announce a dividend of 45c a share for the current quarter, up from 43c in the fourth quarter. Fourth-quarter production rose to 3.4 million barrels a day from 3.3 million a year earlier.

Shell is the first of the oil majors to post fourth-quarter results. Exxon Mobil and Chevron are expected to report today, and BP on Tuesday.

Shell produced more gas than oil for the first time last year as the gap between prices for the two fuels widens.

Brent crude prices were the highest ever on average last year at $111.68 a barrel, while the average cost of West Texas Intermediate fell to $94.15 a barrel from $95.11 in 2011. US natural gas prices declined to the lowest since 1999.

Profit in the unit that produces oil and gas slipped 14 percent in the fourth quarter from a year earlier. The refining unit returned to profit after a loss in 2011. – Bloomberg