Oil giant Royal Dutch/Shell Group saw profits rise 118% in the first quarter, largely thanks to higher oil prices and its recent restructuring programme.

Net earnings in the first three months of the year were well above expectations at $3.13bn compared with $1.44bn in the same period last year.

The Anglo-Dutch company's shares jumped to record highs on the Amsterdam stock exchange following the news, rising to 65.20 euros, before falling back again to 64.55.

"We've had an impressive quarter by any standard, delivering the best earnings in our history," Chairman Mark Moody-Stuart said in a statement.

Analysts said the sharp increase in oil prices were the main reason for the rise, with North Sea Brent crude averaging $26.95 per barrel in the quarter compared with $11.30 in the same period of 1999.

Cost cutting

"(The results) are clearly above expectations," said KBW Wesselius analyst Niels de Zwart.

"What stands out is the widening of the refinery margins, and also their chemicals division has shown significant growth."

The company said it had made good progress in its cost improvement target of $4bn a year. It embarked on a major restructuring plan, which involved cost cutting and sell-offs in late 1998 amid sliding oil prices at that time.

It said expenditure was �1.12bn, down 34% from �1.694bn in the same period a year ago.

Shell said that overall demand for oil products was high while global supply remained thin, despite an anticipated increase in production later in the year.

Royal Dutch/Shell is 60% owned by Royal Dutch Petroleum Co of the Netherlands and 40% by Shell Transport and Trading Plc in the UK.

Its shares are traded on both the London and Amsterdam stock exchanges.