Shell to cut spending and jobs in the USA
14 March 2014
Royal Dutch Shell will cut spending by a fifth and lay off staff at its US exploration and production division, the company said on March 13. This follows disappointing results in its US shale operations and the decision in January to suspend its Arctic drilling programme, which faced serious problems in 2013.
It is already selling more than 700,000 acres of US shale assets, and will cut permanent staff and contractors in North American onshore oil and gas exploration by 30% to about 1,400.
"Financial performance there is frankly not acceptable ... some of our exploration bets have simply not worked out," group CEO Ben van Beurden said.
Smaller companies have made significant profits from the booming US shale sector, but majors including Shell, BP and ExxonMobil have been less successful.
These cuts follow the group’s pledge to cut capital expenditure and streamline operations worldwide after a downturn in profitability.
"I don't think it is a matter of trying to reinvent the company in a fundamentally different way; it is a matter of tackling some of the issues that we know need tackling," van Beurden said.
Reuters said the Anglo-Dutch oil major is sticking to its 2014/15 asset divestment target of $15 billion (9 billion pounds), of which $4.5 billion has already been announced. It also said that it is too soon to say whether capital expenditure will decline next year from the planned $35 billion this year.
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