A PRIME candidate to succeed Royal Dutch Shell's departing boss said the company was unlikely to invest in North Sea gas projects at current tax rates after it announced much better than expected profits.

On a day when chief executive Peter Voser said he will quit next year to spend more time with his family, the oil and gas giant announced that it made profits of $7.5 billion (£4.8bn) net of one-offs in the first quarter.

Profits were up 3% on the $7.3bn achieved in the same period last year and well ahead of the $6.3bn expected by analysts.

Simon Henry, who as chief finance officer is in a strong position to succeed Mr Voser, said the results reflected the progress the company has made under the Swiss executive's watch.

Shell has been focusing spending on bumper projects in areas such as Qatar and Canada which are capable of generating high returns for years.

The company announced a 5% rise in the quarterly dividend, reflecting confidence in its prospects amid continuing economic volatility.

Mr Henry shrugged off the recent fall in oil prices saying lower energy prices could boost the insipid economic recovery in areas such as Europe and thus stimulate demand for Shell's products. The price of Brent Crude has fallen 10% this year, to around $100 per barrel.

Mr Henry said Shell expects to be able to generate the cash it needs to fund massive investment and return billions of dollars to shareholders in the current four-year cycle at around $80 per barrel. He noted Shell is investing in developing the giant oil-rich Schiehallion and Clair Ridge fields off Shetland.

"Both of these are good projects with good growth potential, although they will not contribute to the bottom line for three years or more," he told reporters.

However, Mr Henry who plays a key part in deciding how Shell deploys its vast budgets, added: "Gas developments in the North Sea at the moment remain relatively unattractive as a result of the increase in taxes from two years ago in the UK."

The comments may disappoint the Chancellor who has introduced a series of concessions since he provoked anger with a surprise hike in the tax rate applicable to North Sea profits in the 2011 Budget.

George Osborne may have to grant an across-the-board tax cut to persuade Shell to invest in gas fields, rather than the targeted reliefs granted to date.

Last November, Mr Henry said any Government that controls the North Sea has to get the tax regime right or risk frightening off investors.

Mr Henry said Shell has built up an extensive range of potentially attractive projects around the world meaning there is intense competition for investment funding. He said Shell had much higher priorities than to invest in trying to develop shale gas onshore in the UK.

It could not take a view on the potential of shale gas in the UK until many more wells had been drilled by the industry in the country.

Potential operators would also need to consider the fiscal and societal challenges involved.

However, Shell is investing heavily in shale gas in countries such as the US, China and Ukraine.

Mr Henry confirmed the company will consider investing in exploration projects in Russian Arctic waters under the agreement struck recently with Gazprom Neft.

Asked about potential acquisitions, he said Shell would mainly be interested in firms that focused on one of its priority areas. These include deep water exploration and production.

The 54-year-old Mr Voser plans to retire in the first half of 2014. He has been chief executive since July 2009 and an executive director since 2004.

He said: "After such an exciting executive career I feel it is time for a change in my lifestyle and I am looking forward to having more time available for my family and private life."

Shell said it would look outside and inside the company for his replacement. With most big oil companies, new chief executives traditionally come up through the ranks.

Asked if he would put his name forward for the job, Mr Henry said it would be inappropriate to comment.

Shell declared a first quarter dividend of 45 cents, versus 43 cents in the same period last year.

Royal Dutch Shell A shares closed up 10.5p at £22.03.