Shell Plans 6500 Job Losses This Year

Royal Dutch Shell’s second quarter 2015 earnings, on a current cost of supplies (CCS) basis, were $3.4 billion compared with $5.1 billion for the same quarter a year ago.

However, similar to its main competitors, Shell managed to offset these losses thanks to improved refining margins which helped profits at the downstream arm more than double to $3 billion from $1.3 billion 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.

Crude prices have been slow to recover from six-year lows earlier this year as the U.S. produces near the fastest rate in three decades and leading members of OPEC pump at a record pace.

Ben van Beurden, the company’s chief executive, justified Shell’s plans for exploratory drilling in Arctic waters off Alaska this summer, despite strong opposition from environmental groups, citing the potential to catapult company reserves.

As the company’s sustainable cost reduction programs build momentum, operating costs are expected to fall by over $4 billion, or 10 percent in 2015.

Van Beurden said that if Shell does find oil and an acceptable way to develop it, production will not begin until 2030.

“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”.

Some believe Shell’s announcements on Thursday indicate a new sales pitch for its BG deal, viewed as a symbol of the company’s comparatively bullish stance on the oil market.

The prospect of more oil exports from Iran as Western sanctions are lifted is also pressuring prices.

Shell stated that it will cut its workforce by 6,500 people in 2015, in order to remain “resilient in today’s oil price environment”, according to a company statement.

But oil has resumed its slide over the past two months and now trades just below $49 a barrel.

Shell cut spending earlier this year to $33 billion from around $35 billion in 2014.

Centrica was on the list of share losers, down 2% or 5.2p to 270.1p, as it announced plans to cut 6,000 jobs to save £ 750 million over five years. That compares with more than 100,000 eliminated from service providers and drilling contractors. Shell will retain a 1.80% holding in the company following the sale, which is expected to close next year.

-With assistance from Javier Blas in London.