Royal Dutch Shell reported higher first quarter earnings and lifted its dividend on the back of higher commodity prices and refining margins. The company on Thursday said adjusted earnings rose to $3.2bn from $393m in the fourth quarter of 2020 and $2.8bn a year earlier. The Anglo-Dutch group posted net profit of $5.7 billion (4.7 billion euros) in the first three months of the year, Shell said in a statement.

“Shell has made a strong start to 2021, generating over $8 billion of cash in the quarter. Our integrated business model is ideally positioned to benefit from recovering demand. As previously announced, the first quarter 2021 dividend per share has been increased by around 4%, in line with our progressive dividend policy. We have reduced net debt by more than $4 billion this quarter, progressing towards the $65 billion milestone to increase shareholder distributions. Our competitive and robust financial performance provides the platform to achieve the goals of our Powering Progress strategy,” Ben van Beurden, Chief Executive Officer, Royal Dutch Shell, said.  

The company said that the net debt reduction of over $4 billion to $71.3 billion, progressing towards $65 billion. “Once this milestone is achieved, we target to increase shareholder distributions to 20-30% of our cash flow from operations,” it announced.

Shell’s total oil and gas production increased by 3% in the last quarter compared with the last months of 2020, mainly due to the restart of production at the Prelude floating gas project in Australia. Oil and gas production was 1% higher in the last quarter compared with the same time last year.

Shell claims its oil production reached a peak in 2019, and will continue to fall by 1-2% a year to help meet its climate targets. But the company will also expand its capacity to export 33.3m tonnes of liquefied natural gas (LNG) annually by another 7m tonnes a year by the middle of the decade despite warnings that carbon emissions should be urgently reduced in the 2020s.

It also says that Q2 2021 production and LNG liquefaction volumes outlook are expected to be impacted by maintenance activities.