Shell reduces debts as oil rise boosts profits

Royal Dutch Shell said on Thursday it was taking advantage of the rallying oil price to pay down its debts, in a bid to reassure investors its dividend is safe.

The Anglo-Dutch company’s move is in contrast to rival BP, where the debt pile rose sharply in the first three months of the year, despite a strong performance.

Shell became the latest oil major to smash expectations when it said it had more than doubled profits for the first three months.

Earnings rose by 136% to $3.8 billion (£2.9 billion), sending the shares up 3% to 2074.5p.

The strong results demonstrated the rationale of its £35 billion merger with BG Group, which completed last year.

Oil and gas production was 2% higher than last year, at 3.7 million barrels of oil and gas equivalent per day.

Free cashflow of $5.2 billion allowed the company to pay down its debt from £73.3 billion to £72 billion in the first three months, while also covering its dividend for the third quarter in a row.

Chief executive Ben van Beurden called the quarter “strong” and said Shell would invest about $25 billion this year.