Shell’s First-Quarter Profit Fell 89%
Weak energy prices continue to take their toll, as profit dropped sharply at Europe’s largest oil company, Royal Dutch Shell. Energy prices are off nearly 40 percent in the past year, although they have stabilized somewhat of late. And the industry’s players, big and small, are scrambling to limit the damage.
Royal Dutch Shell released its first quarter results on Wednesday, May 4 ,2016. Earnings benefited from lower operating expenses, as steps taken by Shell to reduce costs more than offset the increase in operating expenses associated with BG (BG Group plc has been consolidated within Royal Dutch Shell’s results). Shell also plans to cut 2,800 jobs following the BG deal on top of 7,500 planned cuts as it grapples with low oil prices.
In practice, Shell expects to absorb BG’s capital investment and operating expenses during 2016, with no net increase overall, compared with Shell stand alone in 2015.