Royal Dutch Shell (IW 1000/2) said Thursday that second-quarter net profits tumbled 53% to $4.06 billion on the back of sliding world oil prices and slack demand.
Adjusted net profits, stripping out movements in the value of inventories and other non-operating items, fell almost 13% to $5.72 billion in the three months to the end of June.
That compared with $6.55 billion in the same period of last year and undershot market expectations of $6.46 billion, according to analysts polled by Dow Jones Newswires.
Total oil and gas production rose 1.9% to 3.103 million barrels of oil equivalent per day, aided by giant projects in Canada and Qatar.
"Our industry continues to see significant energy price volatility as a result of economic and political developments," chief executive Peter Voser said .
"We are moving forward in volatile times. Our profits have fallen with energy prices."
However, Voser said Shell would plough ahead with its plans to spend $32 billion this year on the expansion of its production portfolio.
Group revenues dipped to $119.89 billion in the quarter from $124.56 billion.
Royal Dutch Shell's 'A' shares slid 3.09 percent on the results to 2,119.50 pence in early afternoon deals on London's benchmark FTSE 100 index, which was 1.08 percent higher at 5,557.46 points.
"A drop in earnings had been expected, but not to this extent as evidenced by the share price fall," said Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers.
"The deterioration in the oil price of late has weakened profitability. At a time when investors are looking towards blue chip reliability, the disappointment contained in the headline figures is palpable."
In a separate development, Thai oil giant PTT announced that 72.14 percent of Cove Energy shareholders have accepted its £1.22-billion (US$1.9 billion) agreed takeover bid for the Africa-focused group.
PTT's bid, launched in May, had trumped an earlier takeover attempt by Shell.
Shell acknowledged that its Cove offer has now lapsed because it had not received the required number of acceptances.
Copyright Agence France-Presse, 2012
