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Shell annual profits up 242% to £8.5bn as oil prices rise

Royal Dutch Shell has reported a surge in annual profits to £8.5bn – a leap of 242% on the previous year.

The Anglo-Dutch oil major credited the performance on a recovery in oil and gas prices during a “year of transformation” within the business.

The company said: “Full-year earnings benefited mainly from higher realised oil, gas and liquefied natural gas (LNG) prices, improved refining performance and higher production from new fields, which offset the impact of field declines and divestments.”

Shell – like its rivals – suffered during a period of weakness for energy prices that saw Brent crude stutter below $30 a barrel in early 2016.

Prices have slowly recovered ground since then – hitting a three-year high of $70 recently as output cuts by the Opec group of oil-producing nations and Russia, aimed at curbing a supply glut, injected some heat back into the market.

The recovery has also been aided by greater confidence in the world economy.

Shell trimmed upstream operations, offloaded non-core businesses and snapped up gas-focused BG Group in 2016 for £47bn as it moved to shield itself from the weak price environment.

Its chief executive, Ben van Beurden, said those actions had paid off.

He said: “2017 was a year of strong financial performance for Shell. A year of transformation, in which we showed we have what it takes to deliver a world-class investment case.

“We enter 2018 with continued discipline and confidence, committed to the delivery of strong returns and cash.”

Shares fell 2% when the FTSE 100 opened for business on Thursday before clawing back most of those declines.

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