Energy/Economic crisis

Shell warns of job cuts as profits plummet

Article published on the 2009-07-30 Latest update 2009-07-30 13:28 TU

Workers are seen behind a logo for oil company Shell at its London offices Thursday.
(Photo: Reuters)

British energy giant Royal Dutch Shell said Thursday that its second-quarter net profit had plunged 67 per cent to 2.71 billion euros, citing sliding oil prices in a weak economy.

In the group's results statement, Chief Executive Peter Voser said “upstream and downstream” operations had been affected by a difficult economic environment.

He also warned that "substantial" staff reductions were likely as a result of the company's restructuring programme.

On a cost of supplies basis, adjusting for changes in the value of oil held in stock, Shell said profits sank 70 per cent in the three months to June, compared with the same period last year.

Production fell five per cent to 2.96 million barrels of oil equivalent per day as output was hit once again by ongoing violence in Nigeria.

Revenues tumbled 51.4 per cent to 63.88 billion dollars in the second quarter.

Shell added that it had reduced its costs by 700 million dollars during the first half of 2009.

Oil prices had struck record peaks above 147 dollars per barrel in July 2008 but then nosedived as a savage global economic slowdown slashed demand for energy.

Rival British energy group BP had said Tuesday that its second-quarter net profit slumped 53 percent to 4.39 billion dollars. It, too, blamed falling crude oil prices.