Royal Dutch Shell's top executives have dismissed weaker than anticipated fourth quarter earnings as a blip and said Europe's biggest oil company will embark on a new program to boost production, with an eye-catching emphasis on US natural gas.

CEO Peter Voser said on Thursday the 4.3 per cent annual fall in fourth quarter earnings to US$6.5 billion ($6.1 billion) was due to a sharp downturn in industry refining margins and in natural gas prices.

But Mr Voser said he was "pleased" with the company's overall performance, and released new financial targets, including boosting production by 25 per cent, from 3.2 million barrels per day on average in 2011, to 4.0 million barrels by 2018.

Shell also said it will increase its quarterly dividend a cent to US$0.43 in 2012, its first rise in three years.

Analysts were somewhat sceptical about the company's plans, though most would agree that Shell's position has improved since Voser took the top job in 2009.

Then, Shell had targeted a production increase to 3.5 million barrels per day by 2011. Although it missed that goal, its operations have benefited from the company's investments in new production, and timely sales of some refining operations. Shell said on Thursday it generated US$43.2 billion in cash flow in 2011, up from US$33.3 billion in 2010.

Mr Voser told analysts that with 60 new projects under development around the world he expects a further increase in cash-flow of "up to 50 per cent", or around US$200 billion for the four years 2012-2015, assuming oil prices as measured by the Brent benchmark remain in a range of US$80 to US$100 per barrel.

Shell plans US$30 billion in capital expenditures in 2012, 80 per cent of it on production projects, and 60 per cent in North America and Australia, with a focus on liquefied natural gas, or LNG, projects, which allow gas to be transported in compressed form between places with no pipeline.

"We have been looking for ways to leverage Shell's strong resource position in North America," Voser said, citing the company's holdings of natural gas trapped in shale fields in Texas and Pennsylvania.

New techniques of extracting gas have led to oversupply and low prices.

Mr Voser said the company would likely focus on developing shale fields that produce both oil and gas, but that it's also looking at projects to transport gas in the form of LNG, and possibly export some to Asia, as well as projects to convert natural gas to diesel fuel.

One hope is to be able to offer truck drivers cheaper prices at the pump, or at least profit from the growing gap between natural gas and crude oil prices.

At current prices that's "a very profitable prospect", said chief financial officer Simon Henry. However, he said decisions will have to be made "on slightly less optimistic assumptions".

He said the biggest hurdle is the large investment costs needed.

Shell completed a natural gas to diesel project in Qatar last year, but it wound up costing US$18 billion, rather than the US$5 billion it was budgeted at when work began in 2003.

Investec analyst Stuart Joyner said the fourth quarter results were below estimates and Shell's investment costs had been "more for less" - with costs coming in higher than forecast, for less return.

"We expect to see material downgrades to the consensus estimate numbers for 2012 and 2013," he said.