Oil major Royal Dutch Shell reported a boost in profit on Thursday, helped by rising oil prices and improved refining margins.

The FTSE 100 company said first-quarter earnings were $6.9 billion, compared to $4.9 billion for the same period last year, showing a 40 per cent increase in profit.

Shell's chief executive officer, Peter Voser, said: 'We continue to make good progress in implementing our strategy; improving near-term performance, delivering a new wave of production growth and maturing the next generation of growth options for shareholders.'

The firm is the second oil giant to report this week, as slightly more beleaguered BP announced its first-quarter results on Wednesday.

Like BP, Shell said it was undertaking asset sales and cost savings programmes, but without an epic-sized environmental disaster to pay for its cashflow is less strained.

In the period the company sold $3.2 billion of non-core positions, including tight gas assets in South Texas. It said exits of further non-core positions would be announced in the coming year, with proceeds from them mainly expected in 2011-12.

Cash flow from operating activities in the first quarter was $8.6 billion, compared to $4.8 billion a year earlier.

Despite this, oil and gas production in the period was 3 per cent lower than the equivalent period a year ago, at 3,504 thousand barrels of oil equivalent per day (boe/d). But excluding the impact of divestments, production was in line with the same period last year.

This shows the key role played by higher oil prices in improving the firm's finance sheet.

The firm started production at two new projects during the quarter: the 20,000 boe/d Schoonebeek Enhanced Oil Recovery project in the Netherlands and Qatargas 4 LNG, which has a capacity of 7.8 million tonnes per year.

According to Voser, when combined these projects are expected to add 90,000 boe/d of peak production for Shell.