Royal Dutch Shell is cutting a further 1,000 jobs this year as part of the reorganisation that will see the oil giant raise production levels for the first time in 10 years.
The latest redundancies take the total to 7,000 since Peter Voser took over as chief executive last July. They are part of a shake-up that has stripped out $2bn (£1.3bn) of costs last year and will target another $1bn in 2010.
With the majority of the structural changes completed, the company will rebalance its assets to focus on growth, Mr Voser said yesterday. "When I became chief executive the organisation of the company was working against us: Shell was too complicated and working in too many areas," he said. "I want to see sharper delivery and a more commercial focus. We have come a long way but there is a lot more to do."
The group will cut its refining capacity by 15 per cent, make asset sales of between $1bn and $3bn per year in non-core areas, and sell out of 35 per cent of its retail markets. Meanwhile, as 11 projects come on stream, production is set to rise by 11 per cent to 3.5 million barrels of oil per day (bpd) by 2012, spelling the end of a decade of production decline. Exploration success has pushed the reserves-to-production ratio up to 11.9 years, from 10 years in 2008.
"The strategy has different layers," Mr Voser said. "In the near term it is about raising our game, which means sharper delivery, profitability and competitiveness; then it is about delivering on the growth projects launched in the last five years; then it is about working on the next wave of investments that will generate cash flow after 2014."
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