Royal Dutch Shell to Cut 6500 Jobs

Shell said its operating costs were expected to fall by $4billion, or around 10 percent, in 2015 as part of a broadefficiency drive to boost its balance sheet.

Van Beurden maintained Shell is “delivering a competitive performance in today’s oil market downturn”.

Clearly, Shell is operating in highly uncertain times and, as today’s results show, it is being forced to adapt and change its business plan to respond to an ultra-low oil price that seems to be here to stay for the medium term.

But while it appears the company is on its way to putting the Deepwater Horizon spill behind it, Dudley still sees trouble in the future: unremittingly low oil prices.

A sharp decline of around 75 percent in revenue from oil production was once again offset by refining and trading, where earnings more than doubled in the second quarter from a year earlier.

Shell said the sale is consistent with its strategy to concentrate its downstream footprint and to reduce the number of assets it holds.

The leaders of BP appear to have joined their counterparts at Royal Dutch Shell in concluding that oil prices will stay low for longer than anyone had previously expected. The results beat expectations of US$3.18 billion, according to an analyst consensus provided by the company.

The London-listed oil firm warned that it was “planning for a prolonged downturn” in prices, lasting several years, as it moved to slash costs for 2015 by 10%, or £2.6bn. The price of Brent crude has averaged $62 a barrel in the second quarter.

CEO Ben van Beurden stated that the oil industry is facing challenging times and that “urgent and convincing” intervention is therefore necessary in the group.

Oil prices have slumped since reaching a peak of around $115 a barrel last June. The oil giant said the lower figure reflected cost reductions, project cancellations and “re-phasing” of growth options.

In a statement updating investors on its proposed £55bn takeover of rival BG Group, Shell said that the deal was “on track” and the combined group would be reshaped on completion. That will bankroll a return of “at least” $25 billion to shareholders via share buy-backs between 2017 and 2020.

Shell said its sell-down of its stake in Woodside last year and an unplanned shutdown of the North West Shelf venture in Australia had dragged down its sales of LNG in the second quarter by 9 per cent from a year earlier to 5.46 million tonnes.