Shell expects to eliminate 6,500 staff and contractor positions this year as it seeks to reduce operating costs by 10 per cent, the Netherlands-based company said today. The company also plans to reduce capital investment by USD 7 billion, or 20 per cent.
The cuts were announced as Shell reported that second-quarter net income fell 25 per cent to USD 3.99 billion. Brent crude, a benchmark for North Sea oil, averaged about USD 62 a barrel during the period, down from USD 110 in the second quarter of 2014.
Shell also said it had agreed to sell a 33 per cent stake in Japan's Showa Shell Sekiyu for around USD 1.4 billion.
Production of oil and natural gas fell 11 percent to the equivalent of 2.73 million barrels a day during the second quarter, partly due to the sale of assets in North America and security concerns in Nigeria.
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The deal, which is scheduled to be completed in early 2016, will produce cost savings of about USD 2.5 billion a year by 2018, the company said today.
Shell also said it expects to sell USD 30 billion of assets between 2016 and 2018 as the two companies' holdings are combined and restructured.
Looking further into the future, Shell is betting on offshore oil fields in Alaska, which van Beurden described as having the potential to produce more energy than the biggest projects in the Gulf of Mexico.
He said Alaska should be considered a "long-term play." Van Beurden said Shell is taking a prudent approach through the downturn, making sure it can pay dividends to shareholders.
The company will pay a dividend of 47 cents a share on second quarter earnings.
"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," van Beurden said.