Like rivals BP, Statoil and Total it announced reductions in capital investments for a second time this year, shaving another $3 billion off its 2015 budget to bring it to $30 billion. Meanwhile, it is also pressing ahead with plans to drill in the the Arctic this summer and earlier in July it approved development of its deep-water Appomattox oil field in the Gulf of Mexico.
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A sharp decline of around 75 per cent in revenue from oil production was once again offset by refining and trading, where earnings more than doubled from a year earlier.
There are N/A covering research analysts that have issued an anticipated price level where they predict the stock will reach within the next year.
“The company has to be resilient in today’s oil price environment, even though we see the potential for a return to a $70-$90 oil price band in the medium term”, Shell added.
The goal is to be able to “take out cost”, in the hopes of lowering Shell’s capital spending by 20% to make it $7 billion lower and reducing its operating cost by 10% to $4 billion lower in 2015.
Plans for swingeing job cuts at Royal Dutch Shell and British Gas owner Centrica put the blue chips in the spotlight today, while Royal Bank of Scotland made share gains despite revealing half-year losses. “The regulatory filings process and integration planning are both progressing well…These are challenging times for the industry, and we are responding with urgency and determination, but also with a great sense of excitement for the future”.
On the matter of the under review acquisition of competitor UK based oil and gas major BG Group, van Beurden said, “We will re-shape the company once this transaction is complete”. Brent crude futures rose 0.6% to $53.76 per barrel.
Since last year, the prices of crude have dropped significantly due to oversupply from US shale and Organization of Petroleum Exporting Countries (OPEC).
Both countries are areas in which Shell is interested, and the takeover will strengthen its position as the largest supplier of liquified natural gas in the world after Qatar.
Chevron this week said it’s eliminating 1500 jobs to curb spending by about $US1 billion. That compares with more than 100,000 eliminated from service providers and drilling contractors. Analysts polled by Thomson Reuters were expecting $1.01 per share.
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For the half year, group earnings fell 58% to $994m and the company maintained its interim dividend of 14.38 cents per share.
