ROYAL Dutch Shell has confirmed the UK North Sea is one of the core regions it will focus on under a growth strategy that is expected to see it remain in the oil and gas production business for years.

The Anglo Dutch giant reiterated claims that the profits it generates from oil and gas production will allow it to make the required investment in low carbon energy sources in support of efforts to slow climate change.

“Upstream will be an essential part of our portfolio long into the future,” said chief executive Ben van Beurden after Shell posted a $1 billion underlying profit for the third quarter.

READ MORE: North Sea output to fall to 'nearly nothing' by 2050, experts warn

That was down 80 per cent on the $4.8bn achieved in the same period last year. However, Mr van Beurden said Shell had demonstrated its resilience amid the challenges posed by the fall in commodity prices triggered by the Covid-19 coronavirus crisis. The performance reflects the strength of the upstream oil and gas exploration business.

“We are proud of our upstream business and how it has transformed in recent years, tier one assets combined with a relentless focus on resilience and cash generation which truly sets us apart,” Mr van Beurden told reporters.

Shell directors are confident the company will generate enough cash from oil and gas production to be able to increase payouts to investors while investing in growth.

The company said it expects to raise dividend payouts by 4% annually from next year, in spite of uncertainty about how long the fallout from the coronavirus will weigh on the global economy.

In April Shell announced the first cut in its dividend since the Second World War.

READ MORE: Could oil giants justify paying out billions more in dividends amid coronavirus crisis?

As Shell reshapes its business for a low carbon energy world, Mr Beurden said the company expects oil and gas to remain part of the mix for a long time. He said Shell’s production may have peaked last year but noted: “Upstream will be an essential part of the portfolio long into the future.”

The company included the UK North Sea in a list of nine oil and gas regions it has decided offer the best prospects. Mr van Beurden said the core regions are “resilient on both commodity price and carbon”. Others include Nigeria, the Gulf of Mexico and the Permian shale basin in the US.

Shell has interests in around a further 20 countries, including Suriname.Some of these may eventually win promotion to the top division. Businesses in other regions may just be run for cash or sold off.

Shell said it will continue its relentless high grading of its portfolio with expected divestment proceeds of $4bn a year on average. Shell aims to reduce net debt to $65bn, from around $73bn. This is expected to help the firm maintain an investment grade credit rating through the economic cycle.

Mr van Beurden said core regions could be demoted in time, as the company focuses on those with “running room”.

In July he indicated the latter include the North Sea, although Shell retrenched in the area in response to the challenges posed by the last downturn.

READ MORE: West of Shetland said to remain 'world class opportunity' for oil firms 

The company sold off non-core North Sea assets and shed hundreds of jobs but invested heavily in huge fields West of Shetland such as Clair Ridge and the revamped Schiehallion.In July Mr van Beurden said it saw running room in both Clair and Schiehallion.

However, the outlook for jobs in the North Sea remains unclear. Shell employs around 1,000 people in its North Sea business.Shell has said it expects to cut up to 9,000 jobs globally as it looks to slash spending. It employs around 83,000 currently.

“As a result of Covid-19, there continues to be significant uncertainty in the macroeconomic conditions,” said Shell yesterday.

Shell announced a 16.65 cents per share dividend for the third quarter. That was up 4% on the payment for the preceding three months but down 65% on the third quarter of 2019.

Royal Dutch Shell A shares closed up 32.7p at 932.7p. They sold for above 2250p in January.

Mr van Beurden said Shell will provide more detail on the strategy it will follow in order to achieve growth while supporting the energy transition in February.

Charlie Kronick, senior climate adviser for Greenpeace UK, said: “Shell upping the dividend while admitting they may never again produce as much oil as they did in 2019 is a master class in misdirection. "They’re hoping that investors will trust them to make money in the coming low carbon world, with no evidence as to how they’ll do it.”

On Tuesday BP revealed its third quarter profits had fallen to $86m from $2.3bn last time.