Continued financial fall-out from last year’s slump in N. Sea crude oil prices resulted in Shell’s profits plummeting by more than 70%, while the chief executive of Weir Group – the Glasgow-based oil pump-maker – quit after its profits dropped by 25%.
Weir announced that Jon Stanton, the company’s finance director, will step up as chief executive to replace Keith Cochrane with effect from 1 October.
Meanwhile, the company axed 490 jobs in the first half of the year – 90 more than what it had announced in November – as it battled to reduce costs.
The Scottish heavy engineering Titan – which makes valves and pumps for the energy and mining industries – said pretax profit fell to £82 million in the six months ended June 30, from £108 million pounds a year earlier.
Engineering and oilfield services companies have seen revenues plunge as miners and energy explorers cut spending to weather weak oil and commodity prices.
These pressures also contributed a fall of 72% in 2Q profits at Shell – which aims to have cut its workforce by some 12,500 people by the end of this calendar year.
On a current cost of supplies (CCS) basis, Shell’s Q2 2016 earnings, excluding identified items, were $1.045bn – compared to $3.760bn in the second quarter of 2015.
Ben van Beurden, Shell’s Chief Executive, said: “Lower oil prices continue to be a significant challenge across the business, particularly in the Upstream sector.
“We are managing the company through the down-cycle by reducing costs, by delivering on lower and more predictable investment levels, executing our asset sales plans and starting up profitable new projects.
“We are making significant and lasting changes to Shell’s working practices and cost structure. Shell is firmly on track to deliver a $40 billion underlying operating cost run rate at the end of 2016.
“At the same time, integration of Shell and BG is making strong progress, and our operating performance continues to further improve.”
Meanwhile, oilfield services companies John Wood Group – currently grappling with a pay dispute with more than 300 workers in the RMT and Unite trade unions – and Hunting have also issued downbeat forecasts for the full year.