Leaner Shell plans to sell assets and freeze Arctic drilling
Anglo-Dutch oil company Royal Dutch Shell plans to sell assets, cut spending and freeze a controversial Arctic drilling programme to improve returns after a major profit warning.
Just a month into his new job as chief executive of the world's No 3 investor-owned oil company, Ben van Beurden set out plans to make the group much leaner.
The planned changes follow a profit warning for the quarter to the end of December, detailing across-the-board problems that partly reflect how the industry is grappling with flat oil prices, the need to control costs and replace oil reserves.
Other big oil companies are also struggling for profit growth. Shell's warning, two weeks after Mr van Beurden replaced former boss Peter Voser, followed one earlier in January by Chevron, the second-largest US oil company.
Shell's capital spending will fall to $37bn (€27bn) this year from $46bn in 2013, it said, while it will also increase its rate of asset disposals, with a target to sell $15bn worth of assets in 2014-15.
The company said it would also take tough decisions on projects, cancelling this year's planned controversial and costly hunt for oil in Alaska's Arctic seas.
It plans to raise its first quarter dividend by 4pc compared with the same period last year to $0.47 per share. Shares in Shell gained 2.2pc to 2,173 pence, making it one of the top risers on the FTSE.
"This is a good start, they're saying the right things, more loudly and more quantified than we had expected," Royal Bank of Canada analyst Peter Hutton said. (Reuters)