SHELL OIL FIRST QUARTER NET DROPS 61 PCT 
Shell Oil Co said first quarter net
income dropped 61 pct over the prior-year quarter on revenues
that slipped four pct.
    "Lower prices for crude oil and natural gas and reduced
margins in our oil and chemical products businesses were the
major factor for the earings decline," John F. Bookout,
president, said in a statement.
    For the quarter, the company, a unit of Royal Dutch/Shell
Group <RD> <SC>, earned 108 mln dlrs on sales of 4.50 billion
dlrs, compared with 276 mln dlrs on sales of 4.67 billion dlrs
a year ago.
    Bookout said the company is cautiously optimistic oil
markets will be less volatile in coming months than they were
in 1986.
    "In coming months, oil products results should benefit from
seasonally higher gasoline volumes," he said.
    "However, so long as U.S. product inventories remain high,
it may be difficult to fully recover from the depressed margins
of recent periods," he added.
    Bookout said the company's chemical products earnings
should benefit from strong performances in chemical sales
volumes and continued high industry operating rates.
    Shell said its oil and gas exploration and product segment
earned 110 mln dlrs for the quarter vs 91 mln dlrs in 1986.
    It said earnings were hurt by lower selling prices for
crude oil, natural gas and natural gas liquids. Domestic crude
oil prices averaged 14.24 dlrs a barrel, compared with 19.28
dlrs last year, while natural gas prices dropped 24 pct, Shell
said.
    Shell said earnings at its oil products segment plunged by
53 mln dlrs, to eight mln dlrs. It said lower refined product
selling prices were only partially offset by reduced raw
material costs.
    The company said earnings from chemical products also fell
sharply, to 40 mln dlrs from 72 mln dlrs, due mainly to lower
margins, especially in commodity chemicals, coupled with its
pullout from the agricultural chemicals business in October
1986.
    Shell said capital and exploratory outlays totaled 500 mln
dlrs for the quarter, off from 645 mln dlrs.
 Reuter
