April 29 (Bloomberg) -- BP Plc rose the most in eight years and Royal Dutch Shell Plc had its biggest gain since January after the oil companies reported $100 crude prices led to better profits than analysts estimated.

BP surged 6 percent in London trading after Europe's second- biggest oil company posted a 63 percent jump in first-quarter net income to $7.62 billion. Shell A shares in London climbed 5.3 percent as Europe's biggest oil producer said profit gained 25 percent to $9.08 billion. Their combined earnings were higher than Iceland's annual gross domestic product.

``We have a very good set of numbers thanks to higher oil prices,'' Colin Morton, who manages about 1.6 billion pounds ($3.2 billion) at Rensburg Fund Management in Leeds, England, said by phone. Both sets of results ``beat expectations across the board.''

Output rose at Shell and BP in the first three months of the year, helping to counter falling margins from refining as processed fuels such as gasoline and diesel failed to keep pace with crude gains. Oil reached $111.80 a barrel in March while natural gas increased by an average 22 percent. Crude touched a record $119.93 in New York yesterday.

Excluding changes from holding inventories and one-time items, Shell's profit was $7.85 billion, beating the $6.88 billion median estimate of eight analysts surveyed by Bloomberg. BP's profit on the same basis advanced to $6.49 billion, above the eight-analyst median estimate of $5.26 billion.

BP increased 34.5 pence to 613 pence. Shell A shares, which slid 18 percent during the first quarter, added 102 pence to 2,043 pence. They earlier had their biggest gain in almost three years.

ConocoPhillips, Exxon

ConocoPhillips, the third-largest U.S. oil company, said April 24 that first-quarter profit rose 17 percent to $4.14 billion as crude and gas prices gained. Exxon Mobil Corp., the world's biggest oil company, reports earnings on May 1, with U.S. No. 2 Chevron Corp. a day later.

Shell Chief Executive Officer Jeroen van der Veer, 60 and scheduled to retire on June 30, 2009, relied on increasing natural gas production to make up for slumping crude output.

The Hague-based company said militant attacks in Nigeria forced it to shut in 164,000 barrels a day of production.

``We are seeing an uptick in attacks,'' Chief Financial Officer Peter Voser said on a conference call. The Movement for the Emancipation of the Niger Delta, or MEND, has stepped up attacks on pipelines in Nigeria's oil-rich Niger Delta in recent weeks in an attempt to cripple the nation's crude exports.

Overall Output

Overall output increased to more than 3.52 million barrels of oil equivalent a day, above the 3.37 million estimated by analysts. Gas output gained 9 percent in the period, with oil production down 6 percent.

Shell's net investment this year will be between $26 billion and $27 billion, Voser said. It is designed to add 1 million barrels a day of production and 300,000 barrels a day of downstream capacity, he said.

BP CEO Tony Hayward, 50, who replaced John Browne a year ago, is bringing new production and refining capacity on line to boost earnings. The London-based company expects its Thunder Horse platform in the Gulf of Mexico to start later in 2008 after a three-year delay. The facility is designed to pump 250,000 barrels of oil and 200 million standard cubic feet of gas per day.

The company said April 22 that it began oil production at the Deep Water Gunashli field in the Azerbaijan section of the Caspian Sea. Production there is expected to reach 320,000 barrels a day.

BP said refinery availability rose to 88 percent in the first quarter from 81.6 percent a year earlier after repairs at the Whiting, Indiana, plant and the Texas City refinery, damaged by a fatal explosion and hurricane in 2005, returned units to service.

Refinery processing fell in the period, mostly because of maintenance at BP's Carson, California, facility.

Profit from turning crude into fuels such as gasoline and diesel fell to $4.57 a barrel in the first quarter from $9.41 a year earlier, according to BP data.

To contact the reporters on this story: Fred Pals in Amsterdam at fpals@bloomberg.net; Eduard Gismatullin in London at egismatullin@bloomberg.net

Last Updated: April 29, 2008 12:38 EDT