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Shell Sacks 6,500, Slash Capital Spending by Adesiji77: 8:38am On Jul 31, 2015
Royal Dutch Shell is cutting 6,500 jobs in Nigeria and at the rest of its global operations and will reduce capital spending by 20 per cent this year, as the oil company takes dramatic action in response to the plunge in oil prices.

The Anglo-Dutch group announced on Thursday its investment this year would decline $7bn from last year’s levels to about $30bn, a bigger drop than forecast just three months ago, as it axed and postponed new projects.

It expected to make further reductions to operating costs in 2016 after a 10 per cent fall this year the Financial Times reports.

The action comes amid savage cost-cutting and industry-wide moves to push back billions of dollars of spending on new projects, following the collapse in crude prices over the last year. Some $200bn of spending on major oil and gas projects has now been deferred since the crude price began falling, a decline that accelerated when Opec opted not to cut output in the face of soaring US production.

Shell reported a 37 per cent fall in second-quarter earnings to $3.8bn on a current cost of supplies basis, excluding identified items — a measure of profits preferred by analysts. This compared with $6.1bn in the same quarter last year and beat analysts’ expectations.

The company pointed to improved refining margins and a strong downstream result, where profits more than doubled from $1.3bn to $3bn, that offset the impact of sharply lower crude prices — down now to $53 a barrel from last summer’s peak of $115.

Shell-Nigeria

Profits from exploration and production fell 78 per cent to $1bn and its Americas arm suffered a loss. Output declined 11 per cent to 2.7m barrels of oil equivalent a day from year ago levels.

In a statement updating investors on its proposed £55bn takeover of rival BG Group, Shell said that the deal was “on track” and the combined group would be reshaped on completion.

“We have to be resilient in a world where oil prices remain low for some time, whilst keeping an eye on recovery,” said Ben van Beurden, chief executive. “We’re taking a prudent approach, pulling on powerful financial levers to manage through this downturn, always making sure we have the capacity to pay attractive dividends for shareholders.

The reshaping of the combined group would include “reduced exploration spend, a fresh look at capital allocation in longer term plays, and asset sales spanning upstream and downstream.

This should concentrate our portfolio into fewer, higher value positions, where we can apply our know-how with better economy of scale.”

The company warned that the oil price downturn could last “for several years”, taking a more bearish outlook on the crude price than only a few months months ago, and said its planning assumptions reflected “today’s market realities”. It saw the “potential” for a return to a $70 to $90 price in the medium term.

Shell said it anticipated a 6,500 reduction in staff and contractor job numbers in 2015 and forecast capital investment to be about $30bn, or $3bn less than it expected in April. The “pro-forma” budget for the enlarged group would be $35bn next year, less than projected previously.

This reflected “cost reductions, project cancellations and re-phasing of growth options”. It follows similar moves by other “supermajors” as they grapple with an industry downturn some have likened to the slump of 1986.

Shell said it would continue to “review both the ongoing projects under construction, and the medium term investment options, to balance returns, affordability and medium term growth potential.”

Among the projects that are going ahead is Appomattox in the US Gulf of Mexico.

It expected asset sales to reach $20bn for 2014 and 2015 overall – and announced the sale of a one third stake in Showa Shell to Japan’s biggest second refiner Idemitsu for $1.4bn. The dividend stayed at 47 cents a share.

Analysts were upbeat, pointing to the strong contribution from Shell’s downstream operation – a common theme for the majors for whom the manufacture of refined oil product act as a hedge against lower crude prices – tougher cost control and the cuts to capital spending.

“It’s another strong beat,” said one. “The market will wait for the analyst presentation to take a final view on this. Shell will no doubt argue that the synergy numbers – and implied ‘breakeven’ oil price for the BG deal – are better than currently estimated.”

Shares in the group have under-performed those of rivals amid concern that Shell will struggle to make the BG deal work if oil prices stay low. Senior executives have responded by stressing to investors that more savings are to come and that the deal works at $70 as well as $90 a barrel.

http://businessdayonline.com/2015/07/nigerian-jobs-at-risk-as-shell-sacks-6500-slash-capital-spending/#.VbslDflViko

2 Likes 2 Shares

Re: Shell Sacks 6,500, Slash Capital Spending by 175(m): 8:39am On Jul 31, 2015
Nawa ooo . .labour market go just overflow
.
.
*modified*
FTC on a thread like dis, is not meant to be celebrated. . .Afraid dey catch me! Pls this space is for dash! Introvert come carry oooo.

2 Likes 1 Share

Re: Shell Sacks 6,500, Slash Capital Spending by E383: 8:41am On Jul 31, 2015
All is well... cry
Re: Shell Sacks 6,500, Slash Capital Spending by Niwdog(m): 8:43am On Jul 31, 2015
At this rate the economy is dwindling... All is not well



Niwdog

1 Like 1 Share

Re: Shell Sacks 6,500, Slash Capital Spending by Antoinne: 8:48am On Jul 31, 2015
Not surprised. Total did theirs. Exxon will soon follow. Only the best brains will remain in these companies.

7 Likes 1 Share

Re: Shell Sacks 6,500, Slash Capital Spending by wildchild1: 8:52am On Jul 31, 2015
The rate at which this oil market is affecting things ehn,God please give our leaders wisdom for the alternative.
6500 to lose their jobs? you know how many people are without jobs right now? sad

i dey sell jersey o,na my hustle be that as i never get job grin
order your football jerseys
https://www.nairaland.com/2447345/2015-2016-new-jerseys-available/2

23 Likes 1 Share

Re: Shell Sacks 6,500, Slash Capital Spending by Nobody: 8:52am On Jul 31, 2015
Wey all those offshore boys wey dey come back once in a month to come intimidate us with liquid liquid cash and snatch all our gfs, very soon them go dey nairaland job section dey drag FTC cheesy

11 Likes 3 Shares

Re: Shell Sacks 6,500, Slash Capital Spending by tolexy007(m): 8:52am On Jul 31, 2015
it may b massive compulsory retirement.....It happens in Total.

1 Like 1 Share

Re: Shell Sacks 6,500, Slash Capital Spending by freesinzu(m): 8:52am On Jul 31, 2015
B
Re: Shell Sacks 6,500, Slash Capital Spending by bigv(m): 8:52am On Jul 31, 2015
O boy!
Re: Shell Sacks 6,500, Slash Capital Spending by adewumiopeyemi(m): 8:52am On Jul 31, 2015
i sight u all... u na GUD morning....
Re: Shell Sacks 6,500, Slash Capital Spending by Nobody: 8:53am On Jul 31, 2015
Z
Re: Shell Sacks 6,500, Slash Capital Spending by ammyluv2002(f): 8:53am On Jul 31, 2015
Wow! This is bad o
Re: Shell Sacks 6,500, Slash Capital Spending by Swagavillage(m): 8:53am On Jul 31, 2015
shell just making the matter worst for us,Microsoft also isn't making it easier for us as they have sacked 34 of their 40 Nigerian staffs http://yesreport..nl/2015/07/microsoft-fires-34-out-of-40-nigerian.html?m=0

jah help us

1 Like 1 Share

Re: Shell Sacks 6,500, Slash Capital Spending by osane09(m): 8:53am On Jul 31, 2015
Tell mi something... Eh shocked
Re: Shell Sacks 6,500, Slash Capital Spending by folabayo1(f): 8:53am On Jul 31, 2015
Why na? lipsrsealed
Re: Shell Sacks 6,500, Slash Capital Spending by natas22: 8:53am On Jul 31, 2015
They are cutting cost


That's what any company would do when they have having financial problems


They are not doing it to harm Nigerian economy they are doing it to stabilize the company. Other big companies around the world have done the same thing.


Nigeria should move fully to agriculture because the price of crude will still go down
www.

8 Likes 4 Shares

Re: Shell Sacks 6,500, Slash Capital Spending by kennyman2000(m): 8:54am On Jul 31, 2015
Mheennn..
Re: Shell Sacks 6,500, Slash Capital Spending by maxiuc(m): 8:54am On Jul 31, 2015
At this point your masters and degrees can't save you but your exprience and hardwork hmm

17 Likes 3 Shares

Re: Shell Sacks 6,500, Slash Capital Spending by iamnemo(m): 8:54am On Jul 31, 2015
Eish. Sorry to the sacked ones. Come into business with me. I will show you how you can pocket 100-300k monthly. Supplying eggs and chicken. Its so damn lucrative!! Check out my personal text.

2 Likes

Re: Shell Sacks 6,500, Slash Capital Spending by Ediss(m): 8:55am On Jul 31, 2015
This is not good for a sick country like Nigeria o. embarassed
Re: Shell Sacks 6,500, Slash Capital Spending by mondob2k(m): 8:55am On Jul 31, 2015
my friend said something abt this yday. Shell stopping operations in Warri. Her Dad worked for Shell. Where is our economy heading?

1 Like

Re: Shell Sacks 6,500, Slash Capital Spending by ceejay80s(m): 8:55am On Jul 31, 2015
Very soon people go pack their load go my village to start farming

Thunder go fire Any body wey blame buhari, ur previous presidents/leaders don kill us finish, nigeria for dey among the most beautiful country today, but some thieves decided to steal billions of our money wey their greatest grand children no fit chop finish

11 Likes 1 Share

Re: Shell Sacks 6,500, Slash Capital Spending by Amaechi5(m): 8:56am On Jul 31, 2015
maxiuc:
At this point your masters and degrees can't save you but your exprience and hardwork hmm
Are you a poly graduate?

5 Likes

Re: Shell Sacks 6,500, Slash Capital Spending by Billygee2u: 8:57am On Jul 31, 2015
haha,
Re: Shell Sacks 6,500, Slash Capital Spending by niggi4life(m): 8:57am On Jul 31, 2015
Mechanized Farming to the rescue, Those who have Ears let them hear now
With the Advent of Walmart coming to Nigeria, All i can see is BOOM Sales for Retailers and also those in the Agricultural section are going to make it Big.
Not everybody will use the internet
Not everybody will make phone calls
Not everybody will buy fuel for Generators
Not everybody will buy cars



But everybody MUST EAT!!!!!!!!!!!!!!!!!!!!!!!!!!


Its high time i start planning fully about this Agriculture of a thing

12 Likes 3 Shares

Re: Shell Sacks 6,500, Slash Capital Spending by ibkgab001: 8:57am On Jul 31, 2015
no more rocking rocking ..... No most of them are at there starnded Zone now

except there big fancy for nothing house and thier big head


Most oil workers sees themselves as small god now the water has enter their snail mouth

1 Like

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