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 &lt;RD> &lt;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 companys 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.
SHELL OIL FIRST QUARTER NET DROPS 61 PCT 