In final weeks of its BG merger, Shell revealed a massive slide in its earnings.
The operator recorded fourth quarter earnings, on a current cost of supplies (CCS) basis, of $1.8billion – a significant dip on last year’s $4.2billion.
Its full year CCS earnings were $3.8billon compared to last year’s $19billion.
Full year 2015 CCS earnings, excluding identified items, were $10.7billion compared with $22.6billion in 2014.
However, chief executive Ben van Beurden hailed the firm’s next chapter, insisting it had retained a strong balance sheet position.
He said: “The completion of the BG transaction, which we are expecting in a matter of weeks, marks the start of a new chapter in Shell, rejuvenating the company, and improving shareholder returns.
“We are making substantial changes in the company, reorganising our Upstream, and reducing costs and capital investment, as we refocus Shell, and respond to lower oil prices. As we have previously indicated, this will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies.
“In 2015, we significantly curtailed spending by reducing the number of new investment decisions and designing lower-cost development solutions. For 2016, we have exited the Bab sour gas project in Abu Dhabi, and are postponing final investment decisions on LNG Canada and Bonga South West in deep water Nigeria. Operating costs and capital investment have been reduced by a total of $12.5 billion as compared to 2014, and we expect further reductions in 2016.
“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.”
The average price of benchmark Brent crude in the fourth quarter was $44.69 a barrel, the lowest since 2004.
Shareholders voted last month to back the mega merger between Shell and BG.
The planned capital investment for the deal is expected to be $33billion, down 45% from 2013 peak combined spending.
Elsewhere, the firm agreed to sell its interest in the Maui natural gas pipeline to First State Investments for $200million.
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