As Shell braces for what it believes will be a prolonged oil price downturn to last “several years”, van Beurden said some 10,000 staff and direct contractor positions will be shed in 2015-16 across both companies as “streamlining and integration” operations continues.
Shell said in a preliminary earnings statement overnight it expects its December quarter 2015 profit to fall at least 42% as the oil price rout deepened, with profit adjusted for one-time items and inventory changes dwindling to $US1.6-1.9 billion ($A2.3-2.74 billion).
This was slightly down from the $1.8 billion average estimate of nine analysts that Bloomberg surveyed, and a $3.3 billion profit a year earlier.
As part of its streamlining, Shell will cut operating costs by $3 billion this year having slashed it by $4 billion, or 10%, in 2015.
Its capital investment budget for 2015 will be $29 billion, an $8 billion or 20% fall from 2014, while Shell and BG’s combined capital investment for 2016 is expected to be $33 billion, which is about a 45% reduction from combined spending which peaked in 2013.
Shell has sold more than $20 billion worth of assets in preparation for the merger, well above the $15 billion set out in early 2014, and the company expects to wrap up $30 billion worth in 2016-18, assuming it can consummate the BG merger.
Shell will hold a general meeting in relation to the merger on January 27 in The Hague, The Netherlands.
BG, meanwhile, is expected to beat its operational performance guidance for 2015 with the ramp-up of both LNG trains at the Queensland Curtis LNG project, and the start-up of its sixth FPSO in Brazil drove a strong exploration and production operational performance.
Its LNG shipping and marketing business delivered 282 cargoes, an increase of 58% on 2014, despite tough market conditions.
The supply increase was mainly due to the 77 cargoes sent from QCLNG and 31 additional spot cargoes.
Of the cargoes, 209 were sent to Asian markets – a 58% rise from the 178 sent in 2014, with 17.9 million tonnes sent to customers in 2015 compared to 11MMt the previous year.
However, the continued drop in oil prices and reserve revisions on certain E&P assets, mainly in the haemorrhaging North Sea and Tunisia, led to about $700 million non-cash post-tax impairment charges for Q4 2015.
BG’s Australian production volumes more than doubled to 88,000 barrels of oil equivalent per day, while the company also delivered its first ever LNG cargoes to Egypt, Pakistan and Jordan last year.
