Royal Dutch Shell said fourth-quarter earnings tumbled 44 percent as the collapse in oil prices took its toll on another European oil company.
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Shell rose 4% as it said it made $1.8bn (£1.23bn)for the fourth quarter of the year, compared with a $4.2bn profit for the same period the year before, “Armenpress” reports, citing BBC. The FTSE 100 oil giant company said full year profit dropped to $3.8bn (£2.6bn) from $19bn in 2014.
The company is struggling under the low oil prices and cutbacks implemented in 2015 are not enough to compensate for plummeting profits. Royal Dutch Shell Plc has a 1-year low of GBX 1,261.03 and a 1-year high of GBX 2,283.00.
Shell, which forecast its full-year dividend to remain unchanged, has sought to cut costs across its operations to balance the order books following the decline in oil prices and confirmed it has exited the Bab sour gas project in Abu Dhabi and is postponing final investment decisions on LNG Canada and Bonga South West in deep-water Nigeria.
” Meanwhile, Shellis continuing to make disposals as it seeks to sell up to US$30 billion of assets”.
Shell, which had braced the City for a sharp fall in figures last month, said it had been slashing costs and leading an overhaul to offset the oil price rout, but added it was ready to take further action if needed. Additionally, Royal Dutch Shell plans to reduce around 10,000 staff and direct contractor positions across both companies, through the end of 2016, as part of the streamlining and integrating exercise.
The company cut back hard on investment over the year, while capital spending for the year was slashed to $28.9bn, $8.4bn lower than in 2014.
Capital investment for the combined Shell-BG group is expected to be $33bn this year, down some 45pc from their combined peak in 2013.
Unlike Shell, Tullow Oil has no major revenue streams other than pumping crude, so is much more dependent on prices rebounding soon. The merger had already obtained the required clearances in Brazil, U.S., Europe, Australia, and China, and the shareholder nod essentially means that the deal is all but complete.
Last month, shareholders in Shell voted in favor of its takeover of smaller rival BG Group. However, because of the persistent global oil supply glut due to the constant increase in oil output, the company has lowered its anticipations.
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Share prices of oil services company Petrofac look set to rebound faster than either Shell’s or Tullow’s. The Company’s Downstream business manages Shell’s refining and marketing activities for oil products and chemicals.
