Oil prices may be at record highs but not everything in the energy sector is rosy. The recent high prices are yet to wash through, refining margins have been weak on the West coast of America and US gas prices have actually been declining.

With this background, it is even more of an achievement for Shell to hold its profit slide to only 8 per cent. Inevitably, comparison with BP which is experiencing woes, will flatter Shell and underlines how effectively it has resurrected itself since its reserve troubles three years ago.

The change in fortunes is certainly reflected in the share price. Over the last six months BP has seen a 5 per cent dip in its price, while Shell is up 17 per cent.

But some substantial challenges still remain, if the oil major is to genuinely turn the corner. It has to find replacements for its depleted reserves and there is no escaping that some of the areas in which it is exploring are highly complex and challenging, in both geographical and political risk.

Expecting Russia, Nigeria and possibly Iran to provide growth, will never be easy. Shell has to make its new assets work not only in a record oil price environment, but also when the price falls back to more normal levels.

That requires discipline and attention to detail, which Shell is finally showing and Tony Hayward over at BP is also begining to display.

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