Despite a relatively flat production profile, total production for the quarter was 3.7 million barrels of oil equivalent per day, off around 4% due to asset sales.
Shell CEO Ben van Beurden said oil price, which has risen 50% since the middle of last year, had provided a major boost for the company, which is also the world's largest LNG supplier and which is now poised to potentially overtake ExxonMobil as the energy sector's biggest cash generator.
In addition to revenue from Shell's Western Australian and Queensland LNG operations, soon to be joined by the Prelude LNG development, Australia also chipped in a gain of $US636 million related to the impact of the strengthening Australian dollar on Shell's deferred tax position, which helped offset a loss of $445 million on fair value accounting of commodity derivatives and a charge of $412 million related to the impact of the US tax reform legislation.
Net profit was $4.3 billion versus $1.8 billion in the same quarter a year ago.
Free cash flow rose to $27.6 billion from a negative $10.3 billion in 2016.
Shell's beat analyst consensus for earnings excluding identified items, though its downstream missed out in hitting its targets.
"2017 was a year of strong financial performance for Shell," Van Beurden said.
"A year of transformation, in which we showed we have what it takes to deliver a world-class investment case. Our relentless focus on value, performance and competitiveness meant we were able to deliver $39 billion of cash flow from operations excluding working capital movements from our upgraded portfolio."
"We strengthened our financial framework during the year through an $8 billion reduction in our net debt, while our increased free cash flow generation gave us the confidence to cancel the scrip dividend program in the fourth quarter, in line with what we said previously."
Since its takeover of BG Group in 2016 Shell has become the world's second largest oil and gas producer, and after years of cost cutting, believes it can now generate more cash than it did with oil prices above $100/bbl.
In November it raised its cash flow outlook from $25 billion to $30 billion by 2020, assuming an oil price of $60/bbl.
Van Beurden said the company planned to start a three-year, $25 billion share buyback program "as soon as possible" as the company focuses first on reducing debt.
Shell also plans to double its shale production in the US, Canada and Argentina in the next five to 10 years from the current 275,000bopd
Capital expenditure in 2017 was $24 billion, slightly lower than the $25-$30 billion range Shell set until 2020.