Royal Dutch Shell PLC, Europe's largest oil company, said Thursday it swung to a net loss of $2.81 billion in the fourth quarter, as the price of oil fell sharply and it wrote down the value of inventory. In the same period a year earlier, Shell had $8.47 billion in net profit. The company said fourth quarter sales fell 24 percent to $81.1 billion.

Crude production was down less than one percent to 3.42 million barrels per day, but Shell's selling price fell 29 percent to $58.40. The company said refining profits were down 34 percent on an operating basis, as both intakes volumes and sales volumes fell as a result of weaker demand. Shell's fourth quarter earnings on a "current cost of supplies" basis — which strips out the effect of the fall in oil prices on inventory — would have been down 28 percent to $4.78 billion, the company said. At Shell's exploration and production division, earnings fell 24 percent to $3.7 billion, in line with the fall in oil prices.

Over the full year 2008, net profit fell 16 percent to $26.3 billion. The company declared a dividend of $0.40 per share for the fourth quarter and said it intended to increase that to $0.42 in the first quarter of 2009.

Chief executive Jeroen van der Veer called the results "satisfactory...given the pressure on demand for oil and gas due to a weaker global economy."