Shell Reorganizes as it Plans for ‘Prolonged Downturn’

Shell reorganizes its upstream operation as it plans for a prolonged downturn due to low oil prices Royal Dutch Shell plc said Tuesday it is planning for a prolonged downturn due to low oil prices as the firm announced a reorganization of its upstream operation would increase accountability for performance and align the company to deliver on its strategy. In a statement to coincide with the firm’s ‘management day’, Shell said that both its net investment and dividend payments have been covered by operating cash flow in the year to the end of the third quarter of 2015 – a period during which oil prices averaged $60 per barrel. Shell highlighted cost cutting that has seen a 10-percent reduction in operating costs and a 20-percent reduction in capital spending during 2015, together amounting to $11 billion. The firm’s drive to reduce costs and simplify its business has led to […]

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Shell starts November with asset sales

Royal Dutch Shell announces divestment from Chinese and French markets after reporting weak results for the third quarter. File photo by Brian Kersey/UPI THE HAGUE, Netherlands, Nov. 2 (UPI) — After reporting heavy losses for the third quarter, Royal Dutch Shell said Monday it sold off stakes in Chinese and French holdings in the downstream sector. For $510 million, Shell said it sold off its liquefied petroleum gas business in France to rival DCC Energy. The divestment includes the staff from business entity Butagaz and the brand. In China, for a confidential sum, the Dutch supermajor said it sold a 75 percent stake in a lubricants division to Chinese investment firm Huo’s Group and U.S.-based multinational investor The Carlyle Group. "Both divestments are consistent with Shell’s strategy to concentrate its downstream footprint on assets and markets where it can be most competitive, and to divest its LPG businesses worldwide," […]

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Shell Steams Ahead With BG Takeover With Promise of More Savings

Royal Dutch Shell Plc said its record takeover of BG Group Plc will still deliver value to investors even in a prolonged oil-industry downturn and reshaped its business in preparation for the acquisition. Europe’s biggest oil company will save an addition $1 billion in operating costs from the combination with BG, bringing the total estimate of synergies from the deal to $3.5 billion, Shell said in a statement on Tuesday. The takeover will still add to the company’s earnings per share and cash flow from operations even after the outlook for Brent crude prices to 2018 dropped by $10 to $15 a barrel since the deal was announced in April. Oil’s renewed slump to a six-year low in August prompted some investors to question the logic of the acquisition, valued at $70 billion when it was announced. Shell expects the deal to expand its access to oil reserves in […]

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Shell acquisition of BG cleared by Europe

European Commission clears Shell acquisition of British counterpart BG Group. Photo by Christian Lagerek BRUSSELS, Sept. 2 (UPI) — Royal Dutch Shell and BG Group announced their planned merger received unconditional approval Wednesday from the European Commission. The board of directors at Shell and BG Group issued a joint statement in April saying they’ve reached an agreement for the Dutch acquisition of its rival. The deal, valued at around $70 billion, is among the largest acquisitions since the Exxon Mobil merger was completed in 1999. It also comes at a time when most energy companies are streamlining capital expenses in a weak oil market. Both companies issued statements Wednesday saying the merger was approved by the European Commission, which found the combined corporate market share would be limited in terms of exploration and production despite the acquisition. When the deal was announced Helge Lund , chairman of BG Group, […]

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