AMSTERDAM: Shell has warned that further jobs and investment are at risk in the North Sea as it slashed annual global spending by a further $2bn (£1.3bn) and reported a 56% slump in first-quarter profits.
The Anglo-Dutch oil group said there would be no slowdown in its controversial plans to start drilling in the Alaskan Arctic this summer where it hopes to discover large-scale oil reserves alongside evidence of gas found in the past.
Shell accepted the Guardian’s Keep it in the Ground Campaign had raised the profile of climate change but it believed divestment from fossil fuel companies could be counter-productive.
Simon Henry, the chief financial officer, said the planned takeover of rival BG was a “springboard” for further cutbacks, adding that Shell “is not a natural owner of assets in the North Sea” given the age of those energy fields.
Shell cut 250 jobs from its UK offshore base at Aberdeen last summer and signalled others could go as the oil company announced a further reduction in its overall global spending from $35bn to around $33bn this year.
Henry said positive North Sea tax changes by the government and the establishment of a new Oil and Gas Authority had only gone so far. “[Ministers] have to move quickly to make it attractive – at the moment its not.”
Hit by a massive fall in oil prices since last summer, Shell’s first-quarter earnings, excluding one-time items, fell from $7.33bn to $3.25bn.
Profits for the first three months of 2015 at Shell’s exploration and production arm plunged from $5.7bn a year to $675m, but profits from downstream operations including refining and other non-production businesses rose from $1.58bn to $2.65bn . That helped group earnings exceed analysts’ average forecast of $2.42bn.
