Royal Dutch Shell Regains Solid Footing in 2011
As the final days of 2011 tick down, it's a great time to dust off our portfolios and take a look at how our favorite stocks performed this year. You've probably suffered through some lows and enjoyed some highs following your companies for 12 months, but now it's time to evaluate the whole picture and decide whether your stock is still the right investment for your portfolio.
Today we consider Royal Dutch Shell (NYS: RDS.A) (NYS: RDS.B) , the international oil and gas giant based in The Hague that managed to outperform the S&P this year. But the same global operations that provide Shell with numerous production opportunities worldwide also expose it to geopolitical risk, and this year was no exception.
Shell by the numbers
|Year-to-Date Stock Return||8.99%|
|Market Cap||$227 billion|
|Revenue (TTM)||$455 billion|
|CAPS Rating (out of 5)||****|
Sourcez: Yahoo! Finance and Motley Fool CAPS.
What happened to Shell this year?
Shell began the year on solid ground. Though the company missed analysts' expectations for the fourth quarter of 2010, it was confident the groundwork it laid would foster the sort of future growth that would please shareholders.
Shell announced numerous joint-venture projects in 2011, including:
- An LNG export facility in Kitimat, British Columbia.
- A partnership with Brazil's Petrobras (NYS: PBR) to explore off the coast of Tanzania, an area where natural gas discoveries have boomed this year.
- A 44% stake in a natural gas-capturing project in three Iraqi oil fields.
Starting new projects turned out to bear increasing importance as the year went on, and Shell was forced to curb operations abroad.
Shell has been in Nigeria since the 1950s, but escalating problems with theft and sabotage temporarily shut down several operations this year and prompted the company to divest some assets in the Niger Delta in November.
The company also halted its production in Syria, when the European Union issued sanctions against the Middle Eastern country and halted oil imports. Shell had one of the biggest foreign oil presences in the country, producing 20,000 barrels of oil equivalent per day.
As the year wound down, however, it was clear that despite its difficulties, Shell's shareholders were going to come out on top. The company reported doubling its net income in the third quarter, and Platts Energy ranked it sixth in the world among all energy companies.
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At the time this article was published Fool contributorAimee Duffydoesn't own shares of the companies mentioned in this article. If you have the energy, check out what she's keeping an eye on by following her on Twitter, where she goes by@TMFDuffy.Motley Fool newsletter serviceshave recommended buying shares of Petrobras. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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