Oil giant Shell is to shed 6500 jobs and cut spending to cope with what it expects to be a prolonged slump in oil prices.
The company, which is in the middle of a £55 billion merger with rival BG Group, said that falling oil prices had fuelled a 38% drop in second-quarter profit to $3.25 billion.
Oil prices have slumped since reaching a peak of around $115 a barrel last June. Brent crude was earlier at $53.77.
Warning that the oil-price downturn “could last for several years”, van Beurden said the group would cut its capital-spending budget by 20% for the year and raised the prospect of further reductions in 2016.
“We have to be resilient in a world where oil prices remain low for some time, whilst keeping an eye on recovery.
“We’re taking a prudent approach, pulling on powerful financial levers to manage through this downturn, always making sure we have the capacity to pay attractive dividends to shareholders,” he said.
Investors welcomed the cost-cutting announcements, sending Shell’s shares up by 39.69p, or 2.25%, to 1,804.19p.
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He said Shell, saw potential for the oil price to return to $70-$90 a barrel, but that it must prepare for the downturn to endure for several years.
"We have to be resilient in a world where oil prices remain low for some time, whilst keeping an eye on recovery," he said in a statement.
The industry wide squeeze on profits in the face of fluctuating commodity prices also saw British Gas owner Centrica announce that is was axing up to 6000 jobs on Thursday.
