Exxon, Shell profits soar on oil, refinery strength

Exxon's earnings reached $14.8 billion, shattering the company's previous profit record and rising 58 percent from the year-ago quarter.

But both Exxon and Shell said their oil production declined in the quarter, hurt by the hurricanes that swept through the Gulf of Mexico during the quarter.

U.S. oil prices had peaked above a record $147 per barrel in early July before turning and falling by nearly 60 percent over the next three months.

Still, prices averaged about $118 barrel during the quarter, more than $40 higher than a year-ago period.

Irving, Texas-based Exxon said excluding extraordinary items, it earned $13.39 billion, or $2.59 per share, topping analysts' forecasts of $2.38 per share, according to Reuters Estimates.

Shell's profit rose 71 percent to $10.9 billion, topping analysts' forecasts, but its shares slipped as investors focused on the company's 7 percent drop in oil and gas production.

Shell, which announced Chief Financial Officer Peter Voser would take over from Jeroen van der Veer as chief executive officer in July 2009, said hurricanes that swept through the Gulf of Mexico and a dearth of new project start-ups pulled its production down to 2.93 million barrels of oil equivalent per day.

Exxon's production fell 8 percent, hurt by the hurricanes and higher maintenance activity at its fields.

Both Exxon and Shell recorded strong performance by their refining arms as the decline in crude prices during the quarter helped profit margins.

Shell also said strong sales of jet fuel and diesel in Europe boosted its profits, offsetting declines in gasoline demand.

In India, Oil and Natural Gas Corp (ONGC) reported a 5.7 percent drop in quarterly net profit on Thursday, missing market expectations as its subsidy burden climbed.

ONGC, which accounts for over 78 percent of the country's oil and gas production, has to sell oil from its domestic output at mandated discounts to state-run refiners to keep retail prices low.

Exxon's shares rose 1.4 percent to $75.72 per share in premarket trade, while Shell's shares slipped 2.5 percent in London.

(Reporting by Matt Daily and Euan Rocha in New York, Anna Driver in Houston and Tom Bergin in London, editing by Dave Zimmerman)