SHELL HALTS INVESTMENT IN BONGA DEEP WATER, NIGERIA, SACKS 10,000

According to figures released by the oil company, fourth quarter 2015 CCS earnings were $1.8 billion compared with $3.3 billion for the fourth quarter of 2014, a decrease of 44%.

It noted the fourth quarter 2015 earnings were positively impacted by non-cash net gains of some $0.3 billion related to currency exchange rate effects on deferred tax positions.

Full year 2015 CCS earnings were also negative dropping to $10.7 billion compared with $22.6 billion in 2014.

Speaking on the development, Chief Executive Officer, Royal Dutch Shell, Mr. Ben van Beurden said the company will be laying off 10,000 staff as part of changes in response to lower oil sale and suspend investment in Bona Deep Water, Nigeria and Canada.

“We are making substantial changes in the company, reorganising our Upstream, and reducing costs and capital investment, as we refocus Shell, and respond to lower oil prices. As we have previously indicated, this will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies”, he said.

He explained that in 2015, the company significantly curtailed spending by reducing the number of new investment decisions and designing lower-cost development solutions.

“For 2016, we have exited the Bab sour gas project in Abu Dhabi, and are postponing final investment decisions on LNG Canada and Bonga South West in deep water Nigeria. Operating costs and capital investment have been reduced by a total of $12.5 billion as compared to 2014, and we expect further reductions in 2016, he announced.

He said that as a result of actions in 2015, the company retained a strong balance sheet position, with 14% gearing.

“Shell will take further impactful decisions to manage through the oil price downturn, should conditions warrant that. Shell’s dividends for 2015 were $1.88 per share, and are expected to be at least $1.88 per share in 2016, as previously announced’’, he said.

See below for full statement of account for previous year.

“Royal Dutch Shell’s fourth quarter 2015 earnings, on a current cost of supplies (CCS) basis (see Note 2), were $1.8 billion compared with $4.2 billion for the same quarter a year ago. Full year 2015 CCS earnings were $3.8 billion compared with $19.0 billion in 2014.

“’Fourth quarter 2015 CCS earnings excluding identified items (see page 5) were $1.8 billion compared with $3.3 billion for the fourth quarter of 2014, a decrease of 44%. Fourth quarter 2015 earnings were positively impacted by non-cash net gains of some $0.3 billion related to currency exchange rate effects on deferred tax positions. Full year 2015 CCS earnings excluding identified items were $10.7 billion compared with $22.6 billion in 2014.

“’Compared with the fourth quarter 2014, CCS earnings excluding identified items benefited from continued strong Downstream results reflecting steps taken by the company to improve financial performance. In Upstream, earnings were impacted by the significant decline in oil and gas prices, partly offset by lower costs. Contributions from integrated gas were higher mainly as a result of improved trading performance and the effect of the strengthening of the Australian dollar on deferred tax positions.

“’Fourth quarter 2015 basic CCS earnings per share excluding identified items decreased by 44% versus the fourth quarter 2014. Full year 2015 basic CCS earnings per share excluding identified items decreased by 53% versus 2014.

“’Total dividends distributed to Royal Dutch Shell plc shareholders in the quarter were $3.0 billion, of which $1.2 billion were settled under the Scrip Dividend Programme. No shares were bought back during the fourth quarter.

“’Gearing at the end of 2015 was 14.0% compared with 12.2% at the end of 2014. A fourth quarter 2015 dividend has been announced of $0.47 per ordinary share and $0.94 per American Depositary Share (“ADS”).

“’Royal Dutch Shell is expected to announce a dividend of $0.47 per ordinary share and $0.94 per ADS in respect of the first quarter 2016.)’’.