Shell’s full year 2015 results are expected to record a significant drop of about 54% compared to 2014, in addition to a reduction of some 10,000 positions across BG Group and Shell in an effort to streamline and integrate the two companies.
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Ben van Beurden. Image from Shell. |
Full year earnings for the supermajor on a cost of supplies (CCS) basis, excluding identified items, are expected to be in the region of US$10.4-$10.7 billion, slightly below half of 2014’s $22.6 billion.
Operating costs have reduced by $4 billion, or around 10% in 2015, and the company expects Shell’s costs to fall again in 2016, by a further $3 billion. Synergies from the BG combination will be in addition to that, Royal Dutch Shell CEO Ben van Beurden said in the report.
"The completion of the BG transaction, which we are expecting in a matter of weeks, will mark the start of a new chapter in Shell, to rejuvenate the company, and improve shareholder returns,” van Beurden said. “Together, these actions will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies, as streamlining and integration of the two companies continue.”
Shell is taking steps to refocus and reduce its capital spending, which for 2015, is expected to be $29 billion marking more than a 20% reduction from 2014 at $8 billion.
Capital investment for Shell and BG Group combined in 2016 is currently expected to be $33 billion, around a 45% reduction from combined spending, which peaked in 2013, van Beurden said.
In addition, asset sales for 2014 and 2015 exceed $20 billion, 33.3% more than originally planned in 2014 of $15 billion.
Preparations are well advanced for $30 billion of asset sales in 2016-18, assuming the successful completion of the combination, according to van Beurden.
Production for Q4 2015 is expected to 3.0 MMboe/d, and for the full year 2015 at 2.9 MMboe/d, only about a 6% decrease from full year 2014.
In addition to divestments, van Beurden said that Shell has taken impactful decisions in 2015 to reduce longer term, low return upstream positions, such as the exit from Alaska exploration for the foreseeable future, in addition to other onshore projects.
As for returns to shareholders, dividends declared for 2015 are expected to be $1.88 per share or $12 billion, and for 2016 at least $1.88 per share or, assuming successful completion of the combination, $15 billion in total, the Anglo-Dutch company said.
Shell's Q4 and full year 2015 figures are expected to be published on 4 February 2016.
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