SHELL Transport shares climbed 4p to 454p yesterday on relief that there were no unpleasant surprises in its first-quarter figures.

Net income fell by 23% to $1945m (#1171m) as a result of lower oil prices but this was better than analysts had predicted and was in line with BP's recent performance.

There had been fears that the group's heavy involvement in Asian markets would hit the results harder. Shell has disappointed the market in recent quarters, when it had been hoped that its cost-cutting and efficiency drive would be yielding benefits.

There are now hopes that the relatively strong showing in the first quarter reflects these benefits starting to show through. With Shell now pursuing shareholder value with more vigour, the shares are on many brokers' long-term buy lists despite the difficult trading climate.

Exploration and production earnings collapsed by 45%, with North America the worst hit. Oil prices were down by a third on a year ago and the group noted that after touching a low of $11.90 barrel they have stabilised at between $13 and $14 following a producer agreement to constrain output. Gas prices were flat.

''The outlook for crude prices will be dependent on successful implementation of agreed production cuts,'' the group stated.

Shell's crude production outside North America was up 2% with increases in UK, Syria and Venezuela. Gas sales were down 13%, partly due to the mild winter. In America, oil and gas output was higher but prices were depressed.

In oil products, earnings were 1% higher at $597m. There was strong demand growth in the US and Europe and Asia-Pacific volumes were maintained despite the economic problems. But margins there were down some 43%. Shell believes there could be some recovery in margins in the second quarter as previous destocking reverses.

Refining margins generally were lower due to planned refinery shutdowns. Marketing earnings improved on the back of better margins.

Chemicals' earnings advanced 19% to #290m owing to one-off factors. Margins were lower as petrochemical prices have been weak owing to the Asia-Pacific situation.

Shell is making better use of its strong balance sheet. Higher capital expenditure and long-term investments have cut cash holdings to $5100m, about 35% of the level of a year ago.