Shell’s profits hit by further slide in oil prices

Royal Dutch Shell expects to report a near halving in profits in the last three months of 2015 following the further slide in oil prices, it said yesterday, a week before shareholders meet to vote on its $47bn (€43.1bn) deal to take over rival BG Group.

Giving preliminary estimates for results ahead of the meeting, Shell said its underlying fourth-quarter earnings would be $1.6bn (€1.46bn) to $1.9bn, down from $3.26bn a year ago.

Oil prices fell by another 24% in the fourth quarter, as global supplies continued to outstrip demand, further eroding oil companies’ upstream revenues.

However, BG, which also provided a short trading update yesterday ahead of its own shareholder meeting on the takeover deal next week, positively surprised investors by beating its 2015 production target.

“We believe the in-line performance of both companies should be viewed positively prior to the Shell shareholder vote,” said analysts at BMO Capital Markets, who rate Shell shares as ‘under-perform’.

The companies aim to have cut a combined 10,000 staff and contractor jobs by the end of this year and Shell said yesterday it could further cut combined capital investments below the $33bn targeted for 2016.

Shell shareholders are set to cast their votes on January 27, followed by BG investors the next day, the final hurdles to be cleared for the deal to proceed, one of the biggest energy sector acquisitions in the last decade.

Norway’s $790bn sovereign wealth fund, which is the second and fifth-biggest investor in BG and Shell, said yesterday it would vote in favour of the merger.

Many of Shell and BG’s big shareholders are onboard but a slump in oil prices has raised concerns Shell may be overpaying for the smaller rival. Shell said it expected the deal to go through within weeks. n Reuters


Dr Sarah Miller is the CEO of Dublin’s Rediscovery Centre, the national centre for the Circular Economy in Ireland. She has a degree in Biotechnology and a PHD in Environmental Science in Waste Conversion Technologies.‘We have to give people positive messages’

When I was pregnant with Joan, I knew she was a girl. We didn’t find out the gender of the baby, but I just knew. Or else, I so badly wanted a girl, I convinced myself that is exactly what we were having.Mum's the Word: I have a confession: I never wanted sons. I wanted daughters

What is it about the teenage years that are so problematic for families? Why does the teenage soul rage against the machine of the adult world?Learning Points: It’s not about the phone, it’s about you and your teen

Judy Collins is 80, and still touring. As she gets ready to return to Ireland, she tells Ellie O’Byrne about the songs that have mattered most in her incredible 60-year career.The songs that matter most to Judy Collins from her 60-year career

More From The Irish Examiner