Shell axes jobs and costs to save $1bn

Royal Dutch Shell pushed ahead with plans to streamline its business yesterday when the oil major said it would cut 2,000 jobs over two years and shed more than a third of its global petrol stations.

Shell chief executive Peter Voser outlined the changes at the group’s annual strategy briefing, and this means the number of staff he has axed since he took up his post last July has hit 7,000. It currently employs 100,000.

The company said it planned to sell off 35 per cent of its petrol forecourts, and repeated plans to sell 15 per cent of its world-wide refining portfolio.

The Anglo-Dutch firm said it would save $1bn (£664m) this year through cost cutting
Voser said: “The company had become too complicated and slower to respond than we’d like. So we are sharpening up. The priorities are for a more competitive performance, for growth and for sharper delivery of strategy. We have more to do to drive out cost and improve the operating performance in the company.”

Voser added he expects to spend between $25bn and $27bn a year on capital investment between 2011 and 2014.

Shell vowed to ramp up oil and gas production as it unveiled an increased exploration programme which it said will underpin its long-term growth.

The Anglo-Dutch group is targeting upstream production of 3.5m barrels of oil equivalent per day in 2012 – an increase of 11 per cent from 2009.

Shell said the growth levels were in line with its previous two to three per cent average annual growth rates and it is increasingly confident it could pursue growth beyond 2012.

The company said it is currently assessing over 35 new projects from some 8bn barrels of oil equivalent resources, which should underpin upstream growth to 2020.

Earlier yesterday, Australia’s Arrow Energy said it was in “active discussions” with Shell and PetroChina over their joint $3bn takeover offer.