Royal Dutch Shell, the fourth largest company in the world, is to cut up to 6500 jobs and reduce spending in other areas as the falling oil price takes its toll.
Second quarter earnings were $3.8 billion at the oil giant, compared to $6.1 for the second quarter of 2014, a slide of 37 per cent. The company said the declining price of oil and gas prices and decreased production volumes were to blame.
"We have to be resilient in a world where oil prices remain low for some time, whilst keeping an eye on recovery," Chief Executive Officer Ben van Beurden said in a statement.
Van Beurden said the decision to axe jobs was based on "market realities". He said Shell saw potential for the oil price to return to $70-$90 a barrel, up significantly from the current $50 mark, but that Shell must prepare for the downturn to endure for several years.
"We're taking a prudent approach, pulling on powerful financial levers to manage through this downturn, always making sure we have the capacity to pay attractive dividends for shareholders," Van Beurden said.
The company said it was continuing with its plans to acquire BG. It announced its £47 billion bid to acquire the smaller rival in April.
The industry wide squeeze on profits in the face of fluctuating commodity prices also saw British Gas owner Centrica announce on Thursday that is was axing up to 6000 jobs.Reuse content