Shell will cut 10,000 jobs in its merger with BG Group, and sell $30 billion worth of assets, to protect its profitability in an era of cheap oil.
Here’s the key quote from the statement (emphasis ours):
Synergies from the BG combination will be in addition to that. 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.
The company hopes to make billions from selling assets.
Here’s that quote:
Asset sales for 2014 and 2015 now exceed $20 billion, well above the original plan of $15 billion set out in early 2014. Preparations are well advanced for $30 billion of asset sales in 2016-18, assuming the successful completion of the combination.
The oil price is plunging and CEO Ben van Beaurden’s call of $60 oil in the medium term is looking less likely. The WTI benchmark dipped below $28 in trading on Tuesday.
Here’s that chart:
Despite the collapsing oil price, Van Beaurden was bullish on the company’s prospects beyond the BG merger, saying: “Bold, strategic moves shape our industry. 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.”