Shell profits slump 37% to lowest level in 10 years

Ben van Beurden
Ben van Beurden

Annual profits at Shell slumped to their lowest level in more than a decade as it grappled with a deep downturn.

Shell’s full year profits were down 37 per cent year-on-year to $7.185 billion from  $11.4 billion in 2015.

But Shell management said Europe’s largest oil and gas is ‘turning a corner’ following deep spending cuts, divestments and thousands of job losses last year, with cashflow increasing by 69 percent in the fourth quarter.

With BG Group’s operations fully integrated following its $54 billion acquisition a year ago, Shell said its full year production rose by nearly a quarter from a year earlier to 3.668 million barrels of oil equivalent.

The company’s 2016 capital spending total of $26.9 billion was lower than expected and it stuck to plans to reduce it further in 2017 to around $25 billion. This is at the lower end of the $25-$30 billion range set to run until 2020.

Shell, which has set itself a has a $30 billion debt reduction target, announced two major divestments worth $4.7 billion earlier this week, including the sale of a large part of its North Sea portfolio to private-equity backed Chrysaor.

Earlier this year, Shell sold a stake in a Saudi petrochemical plant for $820 million.

Chief Executive Ben van Beurden said in a statement: “Our strategy is starting to pay off.

“We are reshaping Shell and delivered a good cash flow performance this quarter with over $9 billion in cash flow from operations. Debt has been reduced and, for the second consecutive quarter, free cash flow more than covered our cash dividend.”

See also: 31 Jan 2017

Shell sells N. Sea assets offshore for $3.8bn to US private-equity group

http://www.scottishenergynews.com/shell-sells-n-sea-assets-offshore-for-3-8bn-to-us-private-equity-group/

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