Royal Dutch Shell has achieved a quarterly profits rise of nearly 50 per cent on the back of higher oil prices.
The Anglo-Dutch company said profits for the first three months of the year were $4.9 billion (┬ú3.2 billion)ÔÇöa rise of 49 per cent on the same period last year.
The company said that higher energy prices and growth in its business had helped boost profits from the lower levels seen at the end of last year.
Shell competes with BP as EuropeÔÇÖs biggest oil company, and lacklustre profits for the last three months of 2009 of $1.2 billion (┬ú7.8 million) prompted the company to announce plans to cut 2,000 jobs before the end of 2010ÔÇömainly in downstream and corporate functionsÔÇöwhich it said would help to slash around $1 billion in costs as it aimed to close a performance gap with BP.
Shell wants to dispose of 15 per cent of its refining capacity and is selling retail assets in Africa and Latin America. A total 35 per cent of its current retail markets are currently under review.
The strong quarterly results have also been boosted by oil price rises on the international markets, which have risen from an average cost of $41 per barrel during the same period a year ago to around $76 during the first three months of this year.
ShellÔÇÖs chief executive officer Peter Voser commented: ÔÇ£Our results have improved considerably compared with year-ago levels, and our profitability has increased from the low levels we saw in the fourth quarter 2009. This has been driven by higher energy prices, operational and production performance and ShellÔÇÖs growth programmes.
ÔÇ£I am pleased with the results in the first quarter 2010, which were largely driven by our own actions. The priorities are for a more competitive performance, for growth, and for sharper delivery of strategy. There is more to come from Shell.ÔÇØ
Production of oil and gas also rose during the quarter by six per cent from the same period in 2009 to 3.59 million barrels of oil equivalent per day, which beat analystsÔÇÖ predictions that output would be flat.
Shell is betting on its oil sands ventures in Canada and other projects such as a gas-to-liquids plant in Qatar and coal seam gas reserves in Australia to reverse a seven-year decline in production.
The company is assessing more than 35 projects that may add eight billion barrels of oil equivalent resources, boosting production until 2020.
It is thought that around 40 per cent of the companyÔÇÖs capital spending in the next few years has been earmarked for the Asia-Pacific region. Shell expects the share of gas as a proportion of its total output to rise to 52 per cent in 2012.
The companyÔÇÖs Perdido oil and natural gas platform in the Gulf of Mexico has started production, with full output expected to reach more than 100,000 barrels of oil and 200 million cubic feet of natural gas. The company is also in discussions over a project to capture and sell natural gas in Iraq, having clinched two contracts to develop two Iraqi oil fields.
On Tuesday, BP reported profits of $5.6 billion for the first quarter of 2010, up from $2.4 billion in the same period last year.
