UPDATE 1-Shell's 2017 profits more than double

* Profits rise 120 percent to $16 bln in 2017

* Q4 profits more than double, beating forecasts

* Cashflow strongest since 2014 (Adds details throughout)

LONDON, Feb 1 (Reuters) - Royal Dutch Shell's profit more than doubled in 2017 to $16 billion, their highest since the start of the 2014 downturn, boosted by stronger oil and gas prices and production as well as improved performance.

The Anglo-Dutch company on Thursday also reported a sharp rise in cash flow in 2017 as the effect of years of costs cuts and the integration of the $54 billion acquisition of BG Group in 2016 filtered through.

"We enter 2018 with continued discipline and confidence, committed to the delivery of strong returns and cash," Chief Executive Officer Ben van Beurden said in a statement.

Oil and gas production in the fourth quarter rose from the previous quarter to 3.756 million barrels of oil equivalent per day (boed) from 3.657 million boed.

On a yearly basis, production fell 4 percent as a result of the sale of assets.

Benchmark Brent crude oil price recovered strongly in recent months to reach a three-year high of around $70 a barrel.

On a quarterly basis, Shell's profits, based on a current cost of supplies (CCS) and excluding identified items, rose by 140 percent to $4.3 billion, slightly ahead of forecasts. A company-provided analysts' consensus forecast was $4.24 billion.

Shell in the fourth quarter scrapped its scrip dividend, an austerity policy through which investors can opt to receive dividends in shares or cash.

The move was a sign of confidence that the Anglo-Dutch company is able to maintain around $15 billion in annual dividend payments without resorting to scrip or lending after a three-year oil price downturn.

Shell's debt ratio versus company capitalisation, known as gearing, dropped to 24.8 percent from a peak of 29.2 percent in the third quarter of 2016.

Shell took a $2 billion charge due to new U.S. tax rules, which it nevertheless expects to give it a boost in the longer-term. (Reporting by Ron Bousso; editing by Jason Neely)