Royal Dutch Shell will attempt to show that it is able to ride out the new era of low oil prices when it posts its full-year results on Thursday.
London-listed Shell, which employs 90,000 people in more than 70 countries, is expected to report full-year earnings up 5.4% to 17.6 billion US dollars (£11.6 billion), as it sells non-core assets and scraps projects following the oil price slump.
The moves fit in with the strategy of chief executive Ben van Beurden who took the helm a year ago this month and said he wanted the oil giant to improve operational performance and financial results.
Last week the Anglo-Dutch firm abandoned a 6.5 billion US dollars (£4.3 billion) plan to build one of the world’s biggest petrochemical plants in Qatar with rival Qatar Petroleum.
Shell said the cost of the plant made it “commercially unfeasible, particularly in the current economic climate prevailing in the energy industry.”
This move came amid a flurry of activity among oil producers to scale back new investment in light of oil prices that have dropped by more than half since the summer.
Premier Oil recently said it would delay a final decision on whether to proceed with the 2 billion US dollars (£1.3 billion) Sea Lion production project off the Falkland Islands until there was a recovery in oil prices. Norway’s Statoil handed back three exploration licences on the west coast of Greenland.
Last year Shell announced plans to sell a range of assets in the North Sea, Nigeria and the US as the industry cuts costs as a result of the fall in the oil price. Shell’s cost cutting began this time last year, six months ahead of the oil price collapse.
The market has supported Shell’s strategy sending its shares down just 1% over the last 12 months. By comparison London-listed rival BP has seen its shares fall by almost 16% in the same period.
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