Net profits, adjusted for the value of inventories of oil and gas, rocketed 90 per cent to $18.6 billion (13.5 billion euros) last year, compared with $9.8 billion in 2009, the Anglo-Dutch group said in a results statement.
Ordinary net profit leapt 61 per cent to $20.127 billion, while production grew five per cent to 3.314 million barrels of oil equivalent per day.
The impressive results were published two days after troubled British group BP unveiled its first annual loss in almost two decades as a result of the Gulf of Mexico oil spill disaster. BP suffered a loss of $4.9 billion last year.
"Our 2010 earnings increased substantially from 2009 levels, driven by improving industry fundamentals, and Shell's production growth and cost performance," said Royal Dutch Shell chief executive Peter Voser.
"Fourth quarter and full year 2010 earnings were supported by higher oil prices and chemicals margins."
The Anglo-Dutch group said it was boosted last year by cost-cutting and disposals, while it also invested $3 billion in exploration activities.
"Shell has a strong focus on continuous improvement, reducing costs, enhancing Shell's operating performance, and rebalancing the portfolio for profitable growth," said Voser.
"Underlying costs declined by $2 billion in 2010 compared to 2009, bringing the total underlying cost reduction to some $4 billion for 2009 and 2010 combined, a reduction of some 10 per cent."
Shell sold off $7 billion of non-core assets in 2010, bringing its total asset sales to about $30 billion over the last five years.
The group was also boosted by rising oil prices. New York crude averaged about $85 per barrel in the fourth quarter, compared with $76 last time around.
On Thursday, London Brent oil rocketed above $103 per barrel, hitting the highest level since late 2008 as traders fretted over the impact of the unrest in Egypt on global energy supplies.
However, Shell's share price fell three percent on the London stock market as the fourth-quarter earnings undershot expectations, while many investors took profits on the stock, traders said.
"The company has succumbed to a tinge of disappointment on the numbers and some profit taking, with the shares having risen 27 per cent over the last year, as compared to a wider FTSE 100 gain of 14 per cent," said analyst Richard Hunter at Hargreaves Lansdown Stockbrokers.
"Today's setback is likely to be short-lived, however, with the general market view being that the shares are a buy and currently preferred as a play to BP."
BP's fortunes were ravaged last year by the oil spill disaster, which was widely acknowledged to be the worst environmental catastrophe in US history and has knocked billions of dollars off the its value.