ROYAL DUTCH Shell’s first-quarter profits rose 11 per cent to $7.7 billion, as higher production and strong oil prices outweighed low natural gas prices in the US.

Europe’s largest oil company by market capitalisation said current cost of supply earnings stood at $7.7 billion, or $7.3 billion adjusting for exceptional items. The adjusted figure was 16 per cent higher than a year ago and easily beat analysts’ forecasts.

Shell’s results show how a clutch of huge projects that have been in preparation for years are bearing fruit, delivering a big increase in production. These include Pearl, its flagship $18 billion plant in Qatar that converts natural gas into liquid transport fuels, and a big expansion of its oil sands operation in Canada. Shell said Pearl was on track to reach full capacity in the middle of 2012.

Shell’s shares closed up nearly 3 per cent at £21.90 yesterday.

Oil and gas production was 3.55 million barrels a day (b/d) in the quarter – up 1.4 per cent on a year ago. Underlying output, excluding the impact of factors such as divestments, was up 4 per cent. The company hopes to produce four million b/d by 2017. – (Copyright The Financial Times Limited 2012)