LONDON - Energy group Royal Dutch Shell on Thursday announced an 8% drop in annual net profits owing to a slump in global oil prices and said it would accelerate spending cuts.
Profit after tax dropped to $15.05 billion (13.3 billion euros) in 2014 compared with the Anglo-Dutch company's performance one year earlier, dragged down by plunging earnings in the fourth quarter as the cost of crude tumbled.
"Compared with the fourth quarter 2013, earnings... were impacted by the significant decline in (the price of) oil," Shell said in a statement.
Fourth-quarter net profit plunged 57% to $773 million compared with the final three months of 2013.
Shell said it would slash spending by more than $15.0 billion over the next three years.
"The agenda we set out in early 2014 to balance growth and returns has positioned us well for the current oil market downturn," said Shell chief executive Ben van Beurden.
The agenda we set out in early 2014 to balance growth and returns has positioned us well for the current oil market downturn." - Shell CEO, Ben van Beurden
"We are taking a prudent approach here and we must be careful not to over-react to the recent fall in oil prices. Shell is taking structured decisions to balance growth and returns," he added in the results statement.
Shell noted that lower prices created opportunities for the group to cut costs.
It added that deferring spending in many areas and driving costs down in the supply chain "should result in reduction of potential capital investment for 2015-17 of over $15 billion.”
Copyright Agence France-Presse, 2015