Net profit at Royal Dutch Shell increased more than sevenfold in the first quarter as oil prices recovered from heavy declines, the energy giant said on Thursday.
Profit after tax came in at $3.538 billion (3.240 billion euros) in the three months to March, compared with $484 million in the first quarter of 2016, the Anglo-Dutch group said in a statement.
Royal Dutch Shell chief executive Ben van Beurden said the group had “benefited from improved operational performance and better market conditions”.
Crude futures have recovered thanks to the OPEC oil producers’ cartel adhering to an output cut agreed late last year.
US energy giants ExxonMobil and Chevron, as well as French titan Total and British group BP have all posted bumper profits in the past week.
Oil prices are trading around $50 a barrel, up from $30 at the start of 2016. The hike helped Shell to a revenue increase of 47 percent to $73.3 billion in the first quarter from a year ago.
Shell on Thursday added that first-quarter profit adjusted for exceptional items and the changing value of oil and gas inventories more than quadrupled to $3.38 billion.
“The first quarter 2017 was a strong quarter for Shell,” added van Beurden, who said the company was helped also by reduced debt.
Shell last year bought smaller British rival BG in a deal worth around $68 billion at the time to strengthen the Anglo-Dutch group’s position in the liquefied natural gas (LNG) market.
“Following the successful integration of BG, we are rapidly transforming Shell through the consistent and disciplined execution of our strategy,” van Beurden said Thursday.
“This includes investing around $25 billion this year and the delivery of new projects, which we expect to generate $10 billion in cash flow from operating activities by 2018.”
Royal Dutch Shell shares rose 2.4 percent in morning trades on the London stock exchange.
The group’s latest earnings on “renewed stability in oil prices… appear to justify the somewhat risky decision by Shell management to pay such a big price for BG Group and its LNG assets”, noted Michael Hewson, analyst at CMC Markets UK.
“In seeking to mitigate the cost of this, the company embarked on a $30-billion cost-cutting programme which it is making good progress on.”