Shell earnings rise fuelled by oil price jump

OIL major Royal Dutch Shell beat forecasts yesterday with an 11 per cent rise in quarterly profit, fuelled by higher oil prices.

Europe’s largest oil company by market capitalisation said its current cost of supply (CCS) net income – an industry measure of profit – jumped to $7.66bn (£4.7bn).

Production lifted by 1.4 per cent in the first quarter compared to the same period a year earlier at 3.55m barrels of oil equivalent per day.

Brent Crude prices averaged $118.60 per barrel last quarter, up from $105.43 a year before.

That rise helped to offset falls in US natural gas prices which have plunged to near 10-year lows after supplies were buoyed by shale gas.

Shell raised its target for assets sales in 2012 to $4bn from $2-3bn.

It hiked its dividend for the period by two per cent to 43 cents a share.

But the company’s refining division produced a weaker underlying result. Chief executive Peter Voser said: “Our profits pay for Shell’s dividends and substantial investments in new energy projects, which create value for our shareholders.”

But he said he expected weakness in the refining division to continue. “In downstream and North and North American natural gas we see continued challenges for our industry.”

Earlier this week Shell made a £1.1bn offer for Cove Energy, who is a partner in a major gas find in East Africa’s Mozambique.