Royal Dutch Shell, Europe's second-largest oil company, today reported a 68 per cent rise in third-quarter net profits, boosted by record-high oil prices and strong progress in its asset sales programme.

The Anglo-Dutch group posted net profits - on an adjusted current cost of supply basis - of $7.369 billion (£4.13 billion), compared to $4.38 billion for the same period last year and well ahead of analyst estimates of around $5.2 billion.

The figure was also higher than the $4.4 billion in profits reported by rival BP earlier this week and means that Shell today is turning a profit of some £1.5 million an hour.

Excluding one-off items and stripping out gains from rises in the value of fuel inventories profits came in at $5.8 billion.

The company, which saw its share price plunge last year when it was forced to re-state reserve figures last year, has almost bettered the record figures it posted in 2004 in the first nine months of this year.

Shares in Shell gained 1.41 per cent or 25p to 1,802p in early deals this morning despite the price of oil falling around 3 per cent overnight. To track the stock click here.

The surge in profits came despite a fall in production to 3.2 million barrels of oil a day from 3.6 a year ago as hurricanes in the US Gulf hit production and refining facilities. Shell expects production for the year to average 3.5 million barrels a day, at the low end of its former guidance of 3.5 to 3.8 million.

However, even if production had not been disrupted by the hurricanes, Shell said it would not have matched its output last year. Shell said production would have been 4 per cent lower over summer as new volumes were more than offset by fields yielding less oil and gas and North Sea rigs being shut down for maintenance.

The cost of repairing hurricane damage to rigs and refineries would be approximately $350 million (£196.5m) after tax, although Shell said much of this should be covered by insurance.

The third-quarter figures include an exceptional gain of $1.77 billion, mainly from the sale of pipelines assets and the valuation of some UK gas contracts. Shell has now achieved its target of selling between $12 billion and $15 billion of assets this year ahead of schedule.

Chief executive Jeroen van der Veer said: "Our operational performance is paying off with good results."

The cost of a barrel of US light crude hit an all-time high of $70.85 in August as Hurricane Katrina blazed a trail of destruction through the Gulf of Mexico and on the southern coast of the US.

In the wake of the storm orecourt prices moved above the £1-a-litre mark in the UK. Shell said this had not helped boost profits as margins at its filling stations in Europe and Asia Pacific were weaker than a year ago.

Shell added today that its production in the Gulf was still less than half the levels before the hurricane struck and its Mars platform was unlikely to become fully operational again until after June next year.

Shell also said it had dropped KPMG and retained PriceWaterhouseCoopers as its sole auditor.

Before the union of Royal Dutch Petroleum NV and Shell Transport and Trading PLC this year, the group’s accounts were jointly checked by PwC and KPMG. KPMG’s contract will end on November 7

"The choice of a single audit firm for the company is another step towards simplification and standardisation of our processes," said Peter Voser, chief finance officer.

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