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Shell Profits Plunge By 80% Amid Oil Slump

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Shell is pressing ahead with a £36bn ($52bn) merger with exploration group BG. It has said 10,000 jobs will go across the two companies as a result. The deal has been approved by shareholders and will complete later this month.

The industry has been hammered by the collapse in the world energy market which has seen the price of a barrel of Brent crude dive by three-quarters from $115 in the summer of 2014 to around $30 at the start of this year.

Mr van Beurden said Shell was seeing “substantial changes”, slashing costs and investment in response to the slump – and warned that more cuts could come.

He said: “Shell will take further impactful decisions to manage through the oil price downturn, should conditions warrant that.”

But he expressed optimism about the coming merger deal.

Mr van Beurden said: “The completion of the BG transaction, which we are expecting in a matter of weeks, marks the start of a new chapter in Shell, rejuvenating the company, and improving shareholder returns.”

The company cut back on investments in 2015 and is this year pulling out of a project in Abu Dhabi as well as postponing decisions on work in Canada and Nigeria.

Shell’s annual profit was hit by £4.7bn ($6.8bn) in one-off costs including write-downs in asset values and redundancy and restructuring expenses but earnings were still down sharply on an underlying basis, by 53%, to £7.3bn ($10.7bn).

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