ROYAL Dutch Shell has underlined how much money it is making following the surge in gas prices as it prepares to pay out billions of dollars to investors.

The energy giant, which has a big North Sea business, said the results for its gas division for the last quarter are expected to be significantly higher compared to the preceding three months.

The strong performance follows a dramatic increase in the price that gas commands on wholesale markets. This has been driven by the recovery in demand that has followed the easing of lockdown measures amid supply limitations.

Led by chief executive Ben van Beurden, Shell expects to be able to use the profits if generates from oil and gas sales to support investment in lower carbon energy systems and to fund payouts to investors.

In an update on fourth quarter trading the company reiterated that it expects to distribute 20-30 per cent of the cash flow generated from operations on a regular basis.

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The company is using proceeds of the $9.5bn sale of assets in the US Permian shale basin to ConocoPhillips it made last year to finance additional payouts.

After paying out $1.5bn in December, it said yesterday: “The remaining $5.5 billion of proceeds from the Permian divestment will be distributed in the form of share buybacks at pace.”

Last month the company dropped plans to develop the giant Cambo find off Shetland, which provoked fierce opposition from campaigners. It cited economic factors and the potential for delays.

The company said it would continue to invest in the North Sea.

A spokesman for Shell said at the time: “Continued investment in oil and gas in the UK remains critical to the country’s energy security.”

He added: “We believe the North Sea – and Shell in it – have a critical role to play in the UK’s energy mix.”

READ MORE: Shell boss defends Cambo plan and declares North Sea is 'outstanding' basin

Mr Ben van Beurden expressed strong support for the Cambo plan in October.

Shell won backing from investors last month for a simplification plan under which it has transferred its headquarters from the Netherlands to the UK. The company will drop the words “Royal Dutch” from its name in the week commencing January 24.

The dual class share structure will be replaced by a single class arrangement from January 29.

In yesterday’s update Shell said production for the fourth quarter was expected to average up to 3.2m barrels oil equivalent daily.

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Brent crude sold for more than $70 per barrel during the quarter, compared with less than $50/bbl in the same period of 2020. The price fell below $20/bbl in April 2020.