It's the battle of the oil majors this week, as BP (BP.), BG Group (BG.) and Royal Dutch Shell (RDSB) all unveil their second-quarter results in succession.

Oil prices barely made it out of the headlines during the quarter, as geo-political unrest across the Middle East and North Africa sent them soaring to two-and-a-half-year highs and left analysts questioning how much farther they could go.

Needless to say, investors will be keen to see just how much these three FTSE 100 heavyweights benefited from the rising oil prices and indeed, what impact international and regional macro trends have had on the European international oil companies.

* BP

First up is BP, which has grown used to coming under the scrutiny of investors and the wider market.

But, luckily for this company, second-quarter earnings should show a good increase over last year thanks to the higher oil price. Overall, Charles Stanley analyst Tony Shepard is predicting outturn of $6 billion (£3.7 billion), given the average oil price was some 10% higher in the second quarter compared to the first.

Upstream profit for the quarter is estimated at $8 billion, but turnaround and maintenance activity were high during the period and there is a continuing impact from the Gulf of Mexico drilling moratorium.

As a result, production volumes are expected to be lower with Evolution Securities and Charles Stanley both anticipating a 4% quarter-on-quarter drop and an 11% drop year-on-year.

Net debt at the end of March was $27.5 billion. So far, BP has raised $24 billion from disposals in the wake of its Gulf of Mexico oil spill and the group is very much on track to achieve its $30 billion target by the end of the year.

Importantly, the results will give the management team its first opportunity since February to give a better insight to the company's strategic outlook. The company's failed attempt to secure an exploration deal with Rosneft did little for its reputation, but it has been successful in other areas. It acquired a 30% stake in 23 offshore blocks in India and has secured new access in Australia, Brazil, China and Indonesia.

"BP's shares trade on a lowly 2011 PE of 6.4 times and its market value is some £50 billion lower than Shell's. Clearly there are reasons for this lower valuation and also the discount to the value of its own assets, but at the moment there is not a clear catalyst to narrow the discount and so our recommendation is 'hold'," said Shepard.

* BG Group

BG releases its second-quarter results on Tuesday along with BP.

The company's share price has lagged the peer group and under-performed the market by 6% over the last quarter after a lacklustre set of first quarter results which saw full-year production growth guidance reduced to "modest".

"Give that the BG share rating is relatively high within the sector, this disappointment led to quite poor share price underperformance for most of the second quarter. Therefore, the first benchmark around the second-quarter results will be level of current output and potential for the second half. Second-quarter production may increase by about 2% which would be an improvement on the first quarter, but still a disappointing outcome for such a growth stock," said Shepard.

However, at the end of June the company doubled its estimates for the Brazilian Santos Basin reserves and resources. They are now estimated to amount to some six billion barrels of oil equivalent (boe) net to BG.

The group sees gross installed production capacity rising to in excess of 2.3 million boe per day by 2017. Coupled with its major other projects spanning Australia and the US among others, it will prove a transformational move for the company.

"This year's modest growth represents something of a 'bridge' until next year's ramp-up in production and investors should not be dissuaded given the medium-term prospects," said analysts at BNP Paribas.

On the numbers side, BNP Paribas is looking for adjusted net income of just over $1 billion, around 5% up on the first quarter and 19% higher year-on-year, thanks to a jump in oil and gas prices rather than any change in production.

The exploration and production side of the business is forecast to produce operating profits of $1.3 billion, up 8% on the previous quarter while the year-on-year increase is an impressive 82% due to the much higher oil price.

There is little change expected on the Liquefied Natural Gas profits from last year's $540 million operating profit as BG chooses to hedge out a significant part of the group's forward exposure.

* Royal Dutch Shell

Lastly, Anglo-Dutch giant Royal Dutch Shell steps into the lion's den, having absorbed its rival's results 48 hours earlier.

As with its peers, a large part of the improvement in second quarter earnings will come from higher oil prices and this company could report as much as a 60% rise in earnings to about $6.6 billion.

In the downstream operations, cost savings may have offset the pressure on refining margins and lower activity, helping earnings amount to $1.3 billion. Meanwhile, upstream earnings could come in as firm as $5.6 billion - a 70% uplift on last year's results, according to Shepard.

"A feature of the second-quarter reporting season will be disappointing production volumes across the European industry partly due to heavy maintenance schedules. Nonetheless, we expect Shell to show some positive volume growth in the second quarter in contrast to other oil groups," he said.

A highlight of the period was the Pearl GTL plant in Qatar which shipped its first products last month and is on track to reach full production next year. Shell also boasts an upstream portfolio of above average long-life producing assets such as oil sands, GTL and liquefied natural gas.

"Momentum for RDS is very much about the delivery of major projects that add a one million boe/d of new production," said Evolution Securities analysts.

With some of these set to come on stream and contribute to cash flow and earnings, Shepard believes Shell could consider increasing its dividend.

"An increase would be a major fillip for the share price though the company may wait a little longer until it is fully confident with the start up of its major projects."

Evolution Securities agrees, predicting that the company will leave the quarterly dividend at 42 cents per share for the moment.

"According to our forecasts RDS looks likely to be the sector winner in the second-quarter results on the basis of year-on-year momentum," said analysts at Evolution Securities. "Given where the oil price is currently and market expectations for it to stay above $100 per barrel, RDS could see a surge in cash flow if its new projects deliver and justify a premium rating to BP."

www.iii.co.uk/