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Shell to cut spending by $15 bln over next 3 years

Screen Shot 2015-01-12 at 08.45.23Jan 29 (Reuters) – Oil major Royal Dutch Shell said on Thursday it would curtail spending by $15 billion over the next 3 years while keeping dividends stable in a bid to calm investors amid plunging oil prices.

Europe’s largest oil company by market value kept its fourth-quarter dividend stable versus the previous quarter at $0.47 per share and pledged to pay the same amount in the first quarter of 2015.

The company reported fourth-quarter 2014 earnings on a current cost of supplies basis at $4.2 billion, compared with $2.2 billion a year earlier, meeting expectations.

Oil prices have fallen by almost 60 percent since June because of weak global demand and a boom in U.S. shale production. OPEC in November decided not to cut output in a move the group of oil producing nations hopes will force higher cost producers to trim production.

Oil majors including Shell rivals BP and Total have said they do not intend to cut dividends even if oil prices stay low for longer.

Most oil majors have already announced cuts in capital expenditures of around 10-15 percent and sold assets worth dozens of billions of dollars.

But they have warned against cutting too much as it could derail long-term projects, destroy the value of companies and potentially even lead to an oil shortage in the future.

Shell said in October, when oil prices declined to $85 a barrel, that its organic capital spending in 2015 would likely remain unchanged from 2014 at $35 billion – one of the largest capital investment programmes in the industry.

On Thursday, Shell said it expected 2015 capex to drop but did not say by how much.

(Reporting by Dmitry Zhdannikov and Ron Bousso; editing by Jason Neely)

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