Royal Dutch Shell rises on FTSE 100 after updating market on strategy

One of six 'supermajors' Shell said that it planned on returning to growth in oil and gas production, targetting output of 3.5 million barrels of oil per day by 2012 - up from 3.15 million last year.

Stating the 2009 as the 'best year for exploration in a decade' the company also said it had added 3.4 billion barrels to its reserves in 2009 after the equivalent of 2.4 billion barrels of gas and oil were discovered.

The Shell boss expects oil to trade at between $50 and $90 per barrel in the medium term.

In the interim, Shell may also need to raise its bid for Arrow Energy after a stream of analyst comments and silence on the offer, has led reports to speculate that the offer may be too low.

The coal-seam gas group, Arrow Energy, which shell is bidding for with PetroChina is a natural gas producer in Australia that could supply China's increasing thirst for energy.

"My view is that they will need to raise their offer to the high A$5-A$6 range for the deal to go through." said John Young, analyst at Wilson HTM Investment Group.

Shares in Shell were up 22 pence to 1933.00 by 10:54 GMT.

1,000 jobs were also set to be lost as the company said it was being slow in responding to the recession.