Shell profits jump 54pc despite tough fourth quarter Shell's fourth quarter earnings for 2011 on a 'current cost of supply' (CCS) basis - the oil industry's preferred reporting method that strips out changes to the inventory value - were $6.46bn, down 11pc on the previous quarter, but up 13pc on the same quarter in 2010. "Upstream" earnings - those from oil exploration and production - increased compared with 2010, aided by crude oil prices in the fourth quarter averaging $109 a barrel, compared to $88 a barrel a year before. However the company saw a $278m loss in downstream in the fourth quarter, compared with a profit of $482m in the same quarter of 2010. Royal Dutch Shell Chief Executive Officer Peter Voser said: "Our fourth quarter results were impacted by a sharp downturn in industry refining margins and North American natural gas prices. The global economy and energy markets are likely to see continued high volatility. Despite the near-term uncertainties, Shell's focus remains on through-cycle investment for sustainable growth. Stuart Joyner, analyst at Investec, wrote: "Fourth quarter 2011 CCS earnings, excluding identified items, were $4.8bn compared with $4.1bn in the fourth quarter of 2010. This represents an increase of 18%.... The overall result represents a substantial undershoot against a consensus which just 3 weeks ago was above $7bn. Shell said it would target significant growth and aimed to increase cashflow by 50pc and oil and gas production by 25pc. Apart from a 5pc rise in 2010, the group's production has fallen every year since 2002. Production fell in the fourth quarter of 2011, at 3.3m barrels of oil equivalent per day (boed), compared with 3.5m a year ago. Even excluding the impact of divestments, the fourth quarter production was 3pc lower than the same period the year before. Shell also said its dividend for the first quarter of 2012 was expected to be $0.43 a share, up 2pc on the first quarter of 2011 but below some analyst expectations. Shares fell 61, or 2.62pc, to £22.65 in early trading.