Shell chief executive Ben van Beurden said he would act to make “significant changes” to deal with the collapse in oil prices. It slashed operating costs by $4.3 billion in 2015, and expects to reduce a further $3.0 billion from its cost base in 2016. “As we have previously indicated, this will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies”, he said in an earnings statement.
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Jobs will also be eliminated in the Shell-BG deal and other efforts to boost competitive performance.
During the fourth quarter alone, net profit rose 58% to $ 939 million but its adjusted results CCS fell 44% to 1.825 billion.
The company is very near to finalising a £47-billion ($68-billion, 62 billion-euros) takeover of smaller British rival BG Group after the pair won shareholder backing and cleared regulatory hurdles.
Oil majors have been hit by the fall in the oil price, which has slumped over the past year to reach less than $30 per barrel, from a high above $100 in 2014. The transaction will complete by 15 February, the company said.
As a outcome of the dwindling prices of crude, oil giant Shell, says it has postponed Final Investment Decision (FID) on the $12 billion Bonga South West project in deep water Nigeria.
The liquefied natural gas shipping and marketing business also doubled the amount it delivered to 88 cargoes compared to the fourth quarter in 2014.
In order to lower spending, Shell has scrapped multi-billion pound projects over the past year, including a controversial exploration project in the Alaskan Arctic Sea, the Bab sour gas field in Abu Dhabi and Carmon Creek oil sands project in Canada.
BP boss Bob Dudley has said he believes oil prices will rise to between 50 and 60 U.S. dollars a barrel by the end of the year as production is cut and demand grows from China and the US.
However, the oil price crash weighed heavily on its LNG arm and its upstream division, which produces oil and gas.
Shell’s equity sales of LNG slumped in the fourth quarter of 2015 as a result of the expiry of the Malaysia LNG Dua joint venture agreement, and the $5bn divestment of its 19% stake in Australia’s Woodside Petroleum, the company said.
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“Oil prices have an effect: at a low oil price, projects may be expected to stop pumping sooner, or not start pumping at all”.
