Shell reports 71% plunge in profits

Anglo-Dutch energy giant says quarterly profits fall to $1.18bn in wake of global slump in oil prices. Royal Dutch Shell has reported a 71% plunge in quarterly profits in the wake of the global slump in oil prices.

The Anglo-Dutch energy giant said net profit fell to $1.18bn (£890m) in the second quarter, from $3.99bn a year earlier. Shell’s shares dropped nearly 4% in London on the news. Ben van Beurden, the chief executive, said: “Lower oil prices continue to be a significant challenge across the business.” Shell has been cutting costs and selling assets, and said it was “firmly on track” to deliver $40bn in savings by the end of the year.

Other energy companies, including BP, have also been slashing tens of thousands of jobs and scaling back investment to cope with the oil slump. Brent crude hit a 12-year low of $27.10 a barrel in January, and on Thursday was Shell reports 71% plunge in profitstrading around $43.50. Two years ago, it was at $115 a barrel.

Earlier this week, BP posted a 44% drop in second-quarter profits to $720m. It assumes oil prices will range from $50 to $55 a barrel next year.

Shell has taken over rival BG Group to strengthen its position in the liquefied natural gas market. The £47bn cash and shares deal, completed in February, has increased the size of Europe’s largest oil and gas group, to rival ExxonMobil in the US.

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