The markets were relieved that Shell had managed to produce a profit close to analysts' expectations and the share price rose 3.6% to finish at 498 pence after the announcement.

Shell said the result was achieved in very difficult conditions in the refining, marketing and chemicals businesses. Return on average capital employed for the last 12 months was 15.7%, the company said.

In other Shell news, Shell Australia has announced it will commit $A100 million to its Geelong refinery in Victoria in order to meet tough new fuel quantity standards. A senior Shell Australia executive said despite Australia's downstream oil business being in crisis because of oversupply and ultra-competitive market conditions, the investment did demonstrate its confidence that market conditions would improve.

Next week, Shell Australia is expected to announce a loss of about $100 million in 2001 on its refining and petroleum marketing operations in Australia, in line with the results announced recently by ExxonMobil and Caltex.