Shell has become the latest oil major to report a huge upturn in its first quarter results, buoyed by higher oil prices.
The company recorded pre-tax profits of $3.37billion during the first three months of 2017, a vast improvement on a deficit of $642million a year ago.
Revenues rocketed 48% to $71.8billion, boosted by a 2% rise in oil and gas production to 3.7 million barrels of oil equivalent per day.
Shell also confirmed that more than $20billion worth of asset sales had been completed or announced as it motors towards it $30billion divestment target.
During the first quarter, Shell announced a deal to sell its interests in nine UK North Sea fields and a 10% stake in Schiehallion, west of Shetland, to Chrysaor for up to $3.8billion.
Upon completion of the sale, Shell will be left with the operatorship of five fields in the central and northern North Sea, and the ONEgas assets to the south. Its main non-operated assets include Clair, Schiehallion and Etap.
Free cash flow for the first quarter came to $5.2billion, which helped Shell reduce its debt and maintain a dividend of 47c per share.
Shell chief executive Ben van Beurden said the first quarter 2017 was a “strong” period for the company as higher oil prices bolstered its balance sheet.
Brent crude prices were very low during the first quarter of 2016, dropping below $30 at one point, but had risen back to between $50 and $60 in the first three months of this year.
On Tuesday, BP reported a marked improvement in its first quarter figures, while Statoil published a strong set of results earlier today.
Mr van Beurden said: “We saw notable improvements in upstream and chemicals, which benefited from improved operational performance and better market conditions. Our operations in Qatar are restarting during the second quarter.
“We continue to reshape Shell’s portfolio and to transform the company with over $20billion divestments completed or announced that will strengthen the balance sheet as they are completed.
“The strategy we have outlined to deliver a world-class investment case is taking shape. Following the successful integration of BG, we are rapidly transforming Shell through the consistent and disciplined execution of our strategy.
“This includes investing around $25billion this year and the delivery of new projects, which we expect to generate $10billion in cash flow from operating activities by 2018.”
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