Shell reveals 48% profits slump

SHELL today revealed the extent of its hangover from last year's oil industry party, saying underlying profits had crashed 48% to $2bn (£1.4bn) in the first quarter of 2002.

But shares in the Anglo-Dutch giant jumped 16 1/2p to 497p as the market applauded its success in avoiding a fall in production and the better-than-expected performance of its refining and marketing division.

In what was almost a repeat of the figures published by BP on Tuesday, Shell said lower oil prices had slashed earnings in its exploration and production arm to $1.45bn from $2.85bn a year ago.

Total production was up 1% as Shell enjoyed a first time contribution from the Fletcher Challenge Energy group acquired last year.

Analysts said the figures would help rebuild investor confidence in Shell following the damage associated with its decision last year to cut production growth targets.

'It is better than a number of people feared,' said BNP Paribas analyst Jon Rigby. 'There is relief that the production numbers have held up.'

BP's profit slumped 57% in the first quarter to $1.6bn, though many in the market had expected an even bigger fall.