Shell profits nearly double

Analysts had been expecting Shell to be one of just a handful of companies that would lift production but the 5% increase was around double the consensus forecast. Chief financial officer Simon Hendry said he was hopeful that Shell could grow production over the year as a whole.

Looking forward Voser said the global economic outlook looks uncertain but said Shell will continue to build itself into a more focused group, announcing plans to raise $7-8 billion from asset sales in 2010-11 as it accelerates its disposal plans.

'We will exit from non-core positions as we refocus our portfolio on material positions with growth potential,' Voser said.

Previously, Shell's disposal plans had been to sell assets worth around $4 billion over two years but Voser said the step-up was neither an attempt to strengthen the company's balance sheet nor an attempt to scupper BP's disposal plans.

'This is about having enough options where we can high-grade the portfolio and get disposal proceeds to grow in the future,' he said.

Voser said it is worrying that other companies including BP have recently increased the size of their disposal programmes but said he wouldn't sell if he didn't get good value, adding 'the upstream assets are attractive and there will be buyers.'

And Henry brushed aside a question about whether the groups' disposal programme and increased cash flow meant the group would return more cash to shareholders in the future, saying simply it has always been Shell's intention 'to pay for capital expenditure and dividends from its cash flow by 2012.'

Shell is one of a number of oil and gas companies that pays its dividend out of debt.

The group said this morning it will pay a 42 cent dividend for the second quarter equal to the payment last year in dollar terms.