Jan. 31 (Bloomberg) -- Exxon Mobil Corp., Royal Dutch Shell Plc and BP Plc may report fourth-quarter earnings fell, the first time the world's three largest oil companies all reported a decline since mid-2002.

Exxon may say tomorrow that per-share quarterly profit fell 11 percent, according to the average estimate of 17 analysts surveyed by Bloomberg. Shell's earnings likely fell 3.7 percent and BP's by 12 percent, according to nine analysts surveyed by Bloomberg.

Earnings suffered as U.S. natural gas prices slid about 44 percent and fuel prices dropped, hurting refining margins. Shell, based in The Hague, lost revenue from Nigeria after militant attacks shut down rigs. Production at BP, which two weeks ago named a successor to Chief Executive Officer John Browne, was hurt by reduced pumping at Alaska's Prudhoe Bay field.

``None of these companies is showing significant production growth to offset a downbeat year,'' said Wes Ralston, an analyst at Howard Weil Inc. in New Orleans. Ralston has a ``hold'' on all the three companies. ``If there is any surprise for the companies, it will be on the downside.''

Shares of Irving, Texas-based Exxon surged 36 percent in 2006. Shell's B class shares in London fell 3.7 percent last year and BP stock lost 8.3 percent. Shell reports profit tomorrow morning in London, with Exxon later in the day. BP announces earnings Feb. 6.

Margins Narrow

Exxon may tomorrow post per-share profit of $1.52, according to the average analyst estimate. Shell will probably say quarterly earnings, excluding oil inventory changes and one-time items, fell to $5.20 billion, the separate survey showed. BP may report $3.89 billion of profit by the same measure, according to the analysts.

Oil prices in New York ended the year at $61.05 a barrel, down 22 percent from a record $78.40 on July 14 and just 1 penny higher than a year earlier. From the end of 2001 through 2005, crude prices more than tripled.

ConocoPhillips, the first major oil company to report fourth- quarter earnings, on Jan. 24 posted its first profit decline in four years because fuel prices dropped. Net income slid 13 percent to $3.2 billion, the Houston-based company said.

Industry refining profit margins, or the gap between crude- oil costs and prices for gasoline and diesel, narrowed to $7.69 per barrel in the fourth quarter, from $10.99 a year earlier.

Exxon shares gained while rivals faltered because the company, led by CEO Rex Tillerson, added new production. Exxon tapped wells in Norway and Nigeria, and also got higher output from a heavy-oil project in Canada.

`Less Pain'

``The more barrels they have to sell the less pain they'll feel,'' said Erik Becker at Waddell & Reed Investment Management Co. in Overland Park, Kansas, where he helps manage $4.5 billion, including Exxon shares.

In Nigeria, damage to facilities after attacks by militants have knocked between 160,000 and 170,000 barrels a day from Shell's output, CEO Jeroen van der Veer said Jan. 26. Losses in the country spurred the company in July to trim its 2006 output forecast.

Shell in December gave up half of its stake in Russia's Sakhalin-2 oil and gas venture to OAO Gazprom, which may reduce its proven reserves by some 500 million barrels, analysts have estimated.

BP shut down more than half of the 400,000 barrel-a-day Alaskan field in August after oil leaked from pipelines that hadn't been adequately monitored for corrosion.

``Less production is going to hurt Shell and BP,'' Gene Pisasale, who helps manage $25 billion at Mercantile Bankshares Corp. in Baltimore, said in a Jan. 23 interview. ``BP's earnings will be down compared with last year because of Prudhoe Bay.''

Strategy Updates

Shell and BP will also give investors annual strategy updates when they report earnings.

``For Shell, the strategy update is key, what are they going to show on reserve replacement and production guidance,'' said Dirk Hoozemans, who helps manage the equivalent of $19.1 billion at Rotterdam-based Robeco Group.

Shell last year said meeting a goal of replacing 100 percent of the oil and gas pumped from its fields from 2004 to 2008 was ``less likely.'' BP has predicted annual output increases of about 4 percent through 2010.

On Jan. 12, BP said Tony Hayward will replace Browne, who is retiring more than a year ahead of plan after the Prudhoe Bay mishaps, a fatal refinery explosion at the company's Texas City refinery, delays at Gulf of Mexico platforms and fuel trading scandals.

Hayward, currently BP's head of exploration and production, will need to focus on finding new sources of energy after delays at its biggest Gulf platforms -- Atlantis and Thunder Horse.

``BP will show some decent production growth from the second half of this year,'' said Ivor Pether, who helps oversee about $15 billion at Royal London Asset Management. ``Shell is still short of proven reserves.''

To contact the reporters on this story: Fred Pals in Amsterdam at fpals@bloomberg.net; Stephen Voss in London at sev@bloomberg.net

Last Updated: January 31, 2007 11:44 EST