Royal Dutch Shell have become the latest oil giant to be hit by the oil industry’s tough conditions, reporting their lowest annual income in 13 years on Thursday.
The company saw 2015 profits fall 87 percent to $1.94 billion, compared to $4.2 billion the year before. Full year earnings were down from $19 billion the year before, to just $3.8 billion in 2015.
The company cut 10,000 jobs two weeks ago as it became clear how hard the books would be hit, with Chief Executive Ben van Beurden confirming in a statement that “Shell will take further impactful decisions to manage through the oil price downturn.”
BP also reported its largest loss ever earlier this week, a further sign that all oil companies are struggling to keep afloat as oil prices drop. Shell has vowed to implement new measures and to continue cost-cutting strategies in order to weather the storm, ditching multi-billion pound projects such as exploration in the Alaskan Arctic.
Shell took over rival group BG in a massive deal that closed last week, despite growing shareholder opposition in the current trading climate. At the time the deal was first aired, oil was trading at $55 a barrel – since then, it has fallen to below $30. Standard Life, one of Shell’s key investors, opposed the deal on the grounds that oil needed to be trading at $60 a barrel for it to make financial sense.
04/02/2016
