ROYAL Dutch Shell highlighted its continued interest in the North Sea after making lower than expected fourth quarter profits in spite of high oil prices.
The Anglo Dutch giant made a $5.6 billion (£3.5bn) current cost of supply (CCS) profit, excluding one-offs, in the last three months of 2012, compared with a consensus analysts' forecast of $6.2bn after incurring increased exploration costs.
However, chief executive Peter Voser said Shell has been making good progress with its strategy of developing bumper projects around the world to drive future growth.
Predicting energy demand would double in the first half of the century amid growth in areas like Asia, Mr Voser said Shell was well-placed to capitalise on the increase.
He underlined Shell's readiness to invest in controversial areas like the Arctic and Nigeria.
But Mr Voser told journalists that Shell's European production generates important cash.
The UK North Sea represents a significant part of the European business.
Mr Voser said Shell expects to maintain stable production in Europe, although many see it as a declining area.
Shell has been investing in big new growth projects in UK waters, such as the redevelopment of the giant Schiehallion field west of Shetland.
It has also invested in older assets such as the Beryl field, where the company expects to use technology to boost returns. In November, Shell's chief financial officer Simon Henry said it was not planning for the prospect of Scotland gaining independence.
He said that any Government has to get the North Sea tax regime right or risk frightening off potential investors.
Yesterday, a Shell spokesperson said: "The future relationship of Scotland and the UK is a political issue and we leave such matters to the politicians and voters. We will closely monitor any future changes in governance or regulatory and fiscal policy which impacts on our business."
Mr Voser noted Shell is developing 30 major projects around the world.
"Our drive to increase our options for future projects means that we are more constrained by limits on capital than by limits on opportunities," he said.
Key areas of focus are deep water, projects involving converting gas into high value liquids and new resources like shale oil.
"In the longer term, we need to develop the Arctic," said Mr Voser. He said around 20% of the world's yet-to-be-discovered resources lie in that area.
Shell has said it is monitoring the long-term potential for shale development in the UK.
Its security experts have been talking to counterparts at BP and Statoil about the siege at the In Amenas plant in Algeria.
In the year to December, Shell made $25.1bn CCS earnings, compared with $24.7bn in 2011.
The company declared a fourth quarter dividend of $0.43 per share, compared with $0.42 in the same period last time.
The first-quarter 2013 dividend is expected to be $0.45 per share, up 4.7% on the first quarter of 2012.
Shell said the average prices it realised for oil and natural gas increased by 1% annually in 2012.
Production increased to 3.3m barrels oil equivalent daily, up from 3.2m boed in 2011.
Shares in Shell closed down 2.8%, 64.5p, at 2241p.
Shell has been shifting some of its exploration budget in the USA from shale gas to more expensive work on shale oil.