- Category: Economic
- Published Thursday, February 4, 2016
- CTV News
LONDON - Royal Dutch Shell said fourth-quarter earnings tumbled 44 per cent as the collapse in oil prices took its toll on another European oil company.
Profit adjusted for changes in the value of inventories and one-time items dropped to $1.83 billion from $3.26 billion in the same period a year earlier, the Anglo-Dutch energy giant said Thursday.
The results came days after Shell sealed a 47-billion-pound takeover of BG Group Plc, which will increase the company's proven reserves of oil and natural gas by 25 per cent. While critics questioned the deal because of the plummeting price of oil, CEO Ben Van Beurden compared it to the bold moves that have defined the industry and promised it would rejuvenate Shell.
The BG deal comes as Shell and other oil companies are slashing jobs and postponing investments to adjust the bottom line to the dramatic circumstances.
Jobs will also be eliminated in the Shell-BG deal. In a trading statement unveiled just before shareholders voted on the BG merger, Shell said earlier this month that streamlining and integration from the deal would include the loss of 10,000 staff and contractor positions across both companies in 2015-2016.
"In 2015, we significantly curtailed spending by reducing the number of new investment decisions and designing lower-cost development solutions," Van Beurden said. "Shell will take further impactful decisions to manage through the oil price downturn, should conditions warrant that."
Brent crude, the benchmark for international oil, fell 34 per cent last year and hit a 12-year low of $27.10 a barrel in January. It traded at $33.54 on Wednesday, having been above $100 a barrel as recently as September 2014.
Net income improved, rising 58 per cent $939 million