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World|business|July 30, 2015 / 03:12 PM
Shell to axe 6,500 jobs and cut spending to cope with lower oil prices

AKIPRESS.COM - shell-gas-station Royal Dutch Shell is to axe 6,500 jobs this year and step up spending cuts, responding to an extended period of lower oil prices which contributed to a 37 percent drop in the oil and gas group's second-quarter profits, reports Reuters.

The Anglo-Dutch company is also increasing asset disposals to $50 billion between 2014 and 2018 as it pushes ahead with its proposed $70 billion acquisition of BG Group.

"We have to be resilient in a world where oil prices remain low for some time, whilst keeping an eye on recovery," Chief Executive Officer Ben van Beurden said.

Shell said it anticipated 6,500 staff and direct contractor reductions globally in 2015 from a total of nearly 100,000 employees, as it grapples with a halving in oil prices to around $55 per barrel in a year.

Like rivals BP, Statoil and Total it announced reductions in capital investments for a second time this year, shaving another $3 billion off its 2015 budget to bring it to $30 billion.

Around 20 to 30 percent of asset sales worth $30 billion between 2016 and 2018 will come from the downstream and midstream businesses, Shell said, leaving the expanded Shell group to focus on fewer but larger and more competitive assets.

Shell will only make two major investment decisions this year, with many projects scaled back, delayed or canceled, van Beurden said. He hinted at further spending cuts if economic conditions worsen, including a steeper drop in oil prices.

The company said it was selling a 33 percent stake in the Showa Shell refinery in Japan to Idemitsu for about $1.4 billion.

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