Royal Dutch Shell has confirmed it is cutting 10,000 jobs amid its steepest fall in annual profits for 13 years.
Royal Dutch Shell became the latest big energy company to file a damage report on the impact of depressed oil prices on Thursday, saying that its adjusted profit fell 56 percent in the fourth quarter of 2015 compared to a year earlier.
Shell said earnings adjusted for inventory changes were $1.8 billion, down sharply from $4.2 billion in the comparable period of 2014.
For 2015, Shell’s earnings fell 80 percent to $3.84 billion, compared to $19 billion in 2014.
Royal Dutch Shell chief executive Ben van Beurden highlighted the action the company has taken in the last year to manage costs in the face of falling oil prices. Shell has announced a fourth quarter dividend of $0.47 per ordinary share and says it expects to announce a similar payment for the first quarter.
In 2015, we significantly curtailed spending by reducing the number of new investment decisions and designing lower-cost development solutions.
As a result of our actions in 2015, we have retained a strong balance sheet position, with 14% gearing. Shell will take further impactful decisions to manage through the oil price downturn, should conditions warrant that. Shell’s dividends for 2015 were $1.88 per share, and are expected to be at least $1.88 per share in 2016, as previously announced.
In a trading statement unveiled just before shareholders voted on the BG merger, Shell said earlier this month that streamlining and integration from the deal would include the loss of 10,000 staff and contractor positions across both companies in 2015/16.
“We are making substantial changes in the company, “ Mr. van Beurden said, “as we refocus Shell and respond to lower oil prices.”
Brent crude, the benchmark for international oil, fell 34 per cent last year and hit a 12-year low of $US27.10 a barrel in January.
It traded at $US33.54 on Wednesday, having been above $100 a barrel as recently as September 2014.
Net income improved, rising 58 per cent $US939 million.
Oil and gas producers have been pounded by the slumping price of oil, amid an unprecedented supply glut.
Mr Van Beurden said: “Shell will take further impactful decisions to manage through the oil price downturn, should conditions warrant that.”