Shell Further Reduces Spending as Profits Fall

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Shell Further Reduces Spending as Profits Fall

By Correspondent

  Royal Dutch Shell has revealed that it will cut its spending by another 10 percent this year. This statement was made as a result of the lower oil prices has continued to affect its business. Shell said it would reduce its investment to $30bn from the earlier planned $33bn, adding that it has come under pressure from shareholders to cut costs. The oil firm also reiterated that its three months profit to March had fallen to $800m from $4.8bn a year earlier. It will be recalled that oil prices have fallen sharply over the past 18 months. The first three months of 2016 oil prices stood at about $35 a barrel, down from a peak of $115 a barrel in June 2014. The company also warned that the quarter earnings could also be affected by low oil and gas prices, significant maintenance at production sites and substantial redundancy and restructuring charges. Shell’s downstream business ”“ which includes refining, had its profit fall to $2bn from $2.6bn a year earlier. However, Ben van Beurden, Shell’s chief executive said, “Downstream and integrated gas businesses are delivering strong results and underpinning our financial performance despite continued low oil and gas prices. “We continue to reduce our spending levels, to capture cost opportunities and manage the financial framework in today’s lower oil price environment.”

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