(Adds analysts, figures, share price, background)
By Dmitry Zhdannikov
LONDON, April 30 (Reuters) - Royal Dutch Shell capped a strong first quarter reporting season for oil majorswith better-than-expected results which were boosted by gasearnings, while shareholders were rewarded with a higherdividend.
Shares in the company were up more than 3 percent at 1303GMT to be among the top performers in the FTSE 100.
Shareholders have urged big oil companies such as BP and Shell to control spending and give back cash because ofconcerns over rising costs in the oil and gas industry. Shell isplanning to divest $15 billion worth of assets in 2014/15 toimprove profitability and payouts.
The company said on Wednesday its cash flow increased to $14billion from $11.6 billion in the first quarter of 2013 and $6billion in the fourth quarter of 2013.
That allowed the oil major to announce a first-quarter 2014dividend of $0.47 per ordinary share, an increase of 4 percentyear-on-year.
Adjusted earnings, stripping out $2.9 billion of writedownsmainly related to refineries in Asia and Europe, beat consensusestimates by 51 percent, but were still down 3 percent from ayear ago to $7.33 billion.
The first quarter reporting season for oil majors also sawrival BP raising its dividend for the second time in sixmonths, Norway's Statoil beatingexpectations, Eni reporting results in line and France's Total disappointing witha profit drop.
"We expect Big Oil to make a comeback in 2014," saidanalysts at Barclays, including Lydia Rainforth.
Shell, which disappointed the market earlier this year witha rare profit warning, said the bulk of its writedown indownstream on Wednesday was related to the Bukom oil refinery inSingapore. The firm said its first quarter upstream earningswere supported by stronger gas results, offset by the impact ofexploration well write-offs, and higher costs and depreciation.
The first quarter also saw new profitable production fromthe deep-water Gulf of Mexico and Iraq fields, together with newLNG from the acquisition of Repsol's portfolio.
"A busy divestment programme is in train, cash generationremains high, cost savings and further financial efficiencieshave been identified, whilst the contributions from Shell's gasbusinesses in particular were robust," said Richard Hunter, headof equities at Hargreaves Lansdown Stockbrokers.
"Less positively, oversupply in the industry, rising costson the back of increasingly difficult explorations, Shell'sexposure to Russia and generally lower margins all presentchallenges," the analyst said.
Analysts at Investec cautioned that Shell's first quarterusually carries seasonally lower costs and stronger results.
"While this is a good start, we would caution against'over-extrapolation'," said analysts at Investec.
Shell first-quarter earnings, on a current cost of suppliesbasis, were $4.5 billion compared with $8.0 billion for thefirst quarter 2013.
"The impairments we have announced today in downstreamreflect Shell's updated views on the outlook for refiningmargins," Chief Executive Ben van Beurden said. "There aresubstantial pressures on the industry from excess capacity,changing product demand, and new oil supplies from liquids-richshales."
Earlier this year, Shell announced it was divesting refiningand marketing businesses in Australia, Italy, Denmark andNorway. (Reporting by Dimitry Zhdannikov; Editing by Larry King andElaine Hardcastle)
BP (BP.)
