Royal Dutch Shell Plc  .com Rotating Header Image

Oil giant Shell set for further cost cuts

Screen Shot 2015-01-25 at 22.35.40

Screen Shot 2015-01-12 at 08.45.23By GEOFF HO: Published Sunday January 25, 2015  

Royal Dutch Shell chief executive Ben van Beurden will outline how the company plans to deal with the collapse in crude oil prices when he unveils its results on Thursday.

The oil giant is expected to reveal further cost-cutting measures alongside a 4.6 per cent fall in its 2014 pre-tax profits to $35 billion (£23.4 billion).

Earlier this month, Shell dropped a $6.5 billion (£4.3 billion) project in Qatar due to the impact of falling oil and gas prices.

However, investors believe that Shell will maintain its dividend, despite the squeeze on its earnings.

The Anglo-Dutch giant is forecast to unveil a fourth-quarter dividend of $0.47 (31p) per share, which would take its total announced 2014 dividend payouts to $12 billion (£8 billion).

The price of oil has more than halved over the past six months to about $50 (£33.35) per barrel due to Opec keeping up production despite over-supply.

The oil cartel, led by Saudi Arabia, is pushing the price down in a bid to drive rival shale oil producers in the US out of business.

The fall in the price of crude is expected to also hurt oil services and equipment providers, as oil producers make cut backs.

Will Smith at New City Investment Managers said: “We’ll see investment cut back and that means the oil services companies’ growth will not be what it was.

“They had four years in clover, now it comes down to hard work.”

SOURCE

Comments are closed.

%d bloggers like this: