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Booming oil prices underpin massive surge in Shell profits

Royal Dutch Shell has announced a 49% surge in first-quarter profits after booming oil prices and brisk growth in output in Russia and Brazil helped to underpin the effects of a cost-cutting drive.

Europe's largest oil company said current cost of supply profits - a key industry measure that strips out fluctuations in the price of crude oil and natural gas - hit $4.9bn (£3.2bn) in the three months to March 31, up from $3.3bn in the same period a year ago.

The results were bolstered by the start-up of two big oil and gas projects on the island of Sakhalin in Russia and at Parque das Conchas off the coast of Brazil. These added 120,000 barrels of oil to Shell's daily production, helping to lift its average output by 6% to 3.59 million barrels per day.

Analysts said the results also benefited from a restructuring drive under way at Shell, launched when Peter Voser became chief executive last July. The company shed 5,000 jobs last year and will remove another 1,000 this year, mainly in white-collar roles.

Richard Griffith, oil and gas analyst for Evolution Securities, said: "It looks as if Peter Voser is delivering. We are now seeing clear benefits from Shell's restructuring efforts starting to kick in."