Royal Dutch Shell's profits rose by 60 per cent to $4.8bn (£3.2bn) in the first quarter due to increased production and sharp oil price rises.
The oil major's revenue also rose – by 48 per cent to $88bn – in a first-quarter performance that outstripped analysts' expectations. Financial results from its rival, BP, earlier in the week also beat forecasts. Shell's strong showing was driven by the exploration and production business, which saw profits double to $4.4bn compared with the same quarter of the previous year. Not only did the group manage a 6 per cent increase in oil and gas production levels, which hit 3.59 million barrels per day thanks to the ramping up of projects in Russia and Brazil, but profits also saw a lift from an average oil price of $76 in the quarter, compared with just $41 in the same period a year ago.
Peter Voser, the Shell chief executive, said restructuring plans put in place since he took over the top job last July were also central to the improvements. So far, Shell has cut 5,000 jobs, with another 2,000 to go in 2010/11 and another $1bn to be stripped from the group's costs over the same period.
"Our results have improved considerably with year-ago levels and our profitability has increased from the low levels we saw in the fourth quarter of 2009," Mr Voser said yesterday. "This has been driven by higher energy prices, operational and production performance and Shell's growth programme."
The company's refining and marketing division also reported an improvement, showing $778m in profits. In the fourth quarter of 2009, the business saw a $1.7bn loss as it wrestled with margin pressures at their most intense for 20 years. Shell's share price closed up 2.3 per cent at 2,044p. The dividend was left unchanged at 42 cents per share.
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