Shell profits soar by a fifth on oil price hikes

Profits at Royal Dutch Shell soared by 18 per cent to $3.5bn (£2.2bn) in the third quarter thanks to rising production and sharp rises in the oil price.

The Anglo-Dutch group's booming profits were announced just hours before its rival Exxon outlined net income up by 55 per cent to $7.4bn, as oil majors around the world reaped the benefit from the 12 per cent year-on-year hike in oil prices.

Shell's underlying profits – stripping out one-off items – shot up by an eye-watering 88 per cent to $4.9bn, the company said yesterday, underpinned by a 5 per cent rise in production and sales of liquefied natural gas up by 22 per cent.

The chief executive Peter Voser said: "Our results have rebounded substantially from year-ago levels, driven by some improvement in industry conditions, and Shell's strategy."

The company is in "a delivery window for new growth," Mr Voser said, pointing to new production at the Jackpine oil sands mine and investment decisions on new deep water projects in the Gulf of Mexico and Brazil.

"We are making good progress against our targets, and there is more to come from Shell," Mr Voser said.

Shell is also cuttings its internal costs and selling off less profitable businesses, particularly in its refining and marketing arm. The group has already sold $2bn-worth of assets this year and plans to offload another $6bn-worth by the end of the year.

BP, which reports next week, is expected to be the exception to the industry boom, pulled down by the Deepwater Horizon in the Gulf of Mexico this summer.