MOSCOW (MRC) -- Energy group Royal Dutch Shell has announced an eight-per cent drop in annual net profits owing to a slump in global oil prices and said it would accelerate spending cuts, said Digitalook.
Profit after tax dropped to US15.05 billion (A18.99 billion) in 2014 compared with the Anglo-Dutch company's performance one year earlier, dragged down by plunging earnings in the fourth quarter as the cost of crude tumbled.
"Compared with the fourth quarter 2013, earnings... were impacted by the significant decline in (the price of) oil," Shell said in a statement.
Fourth-quarter net profit plunged 57 per cent to US773 million compared with the final three months of 2013.
Shell said it would slash spending by more than US15.0 billion over the next three years.
"The agenda we set out in early 2014 to balance growth and returns has positioned us well for the current oil market downturn," said Shell chief executive Ben van Beurden.
"We are taking a prudent approach here and we must be careful not to over-react to the recent fall in oil prices. Shell is taking structured decisions to balance growth and returns," he added in the results statement.
Shell noted that lower prices created opportunities for the group to cut costs.
It added that deferring spending in many areas and driving costs down in the supply chain "should result in reduction of potential capital investment for 2015-17 of over US15 billion".
As MRC wrote before, Shell restarted its ethylene cracker in Bukom, Singapore, this week following a three-month maintenance and expansion works to raise the unit's capacity. Shell said the expansion work would increase the capacity of the cracker by 20%. The cracker originally had a capacity of 800,000 tonnes per year (tpy) of ethylene.
Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
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