Yemisi Izuora
Royal Dutch Shell is planning to reduce its workforce by 6,500 this year and step up spending cuts, to deal with an extended period of lower oil prices.
The company also announced sale of a 33 per cent stake in the Showa Shell refinery in Japan to Idemitsu, for about $1.4 billion.
Shell also said it was planning more asset disposals, bringing total asset sales between 2014 and 2018 to $50 billion.
“We have to be resilient in a world where oil prices remain low for some time, whilst keeping an eye on recovery,’’ Chief Executive Officer Ben van Beurden said.
Shell said it anticipated 6,500 staff and direct contractor reductions in 2015 from a total of nearly 100,000 employees.
Lower oil prices have contributed to a 37 per cent drop in the oil and gas group’s second-quarter profits.
And the group said it would reduce 2015 capital investment for the second time this year to $30 billion by 20 per cent from a year ago.
Big oil companies have cut 2015 spending by 10 to 15 per cent from 2014, to cope with a halving of oil prices over the past year to below $55 a barrel.
Rivals BP and Total announced further cuts this week.
Shell said its operating costs were expected to fall by $4 billion, or around 10 per cent, in 2015 as part of a broad efficiency drive to boost its balance sheet.
It also expects $30 billion of asset sales between 2016 and 2018, on top of a total of $20 billion in disposals for 2014 and 2015 combined.
Shell, however, have planned to return to the line of profit by pushing ahead with its proposed $70 billion acquisition of BG Group.
Shell hopes to complete its BG deal by early 2016 and is still awaiting key regulatory approvals from the European Union, China and Australia.