Shell will cut spending by another $5 billion in 2016


Moscow. December 23. Anglo-Dutch oil company Royal Dutsch Shell will cut spending next year by $5 billion due to low oil prices, including capex by $2 billion to $33 billion, writes the Financial Times.

In 2015 the company has already reduced costs by $12 billion.

Shell also promised the shareholders, if they approve its purchase of British gas BG Group in the next two years to reduce total costs by $7 billion, investment is $8 billion and to cut about 10 million jobs.

In 2016-2018 it is assumed the disposal of assets of $30 billion.

In addition, Shell announced that the merger of BG c will work, even if in the future oil prices will fluctuate slightly above $60 per barrel. Previously, the company was called the break-even price of the transaction of $65 per barrel. Brent crude now costs about $USD 36.5 per barrel. In 2016, the company expects to increase oil prices above $50 per barrel.

In published on Tuesday the prospectus for the shareholders the expected date of completion of the transaction with BG called on 15 February. The merger has already been approved by regulators worldwide, but the shareholders still doubt its wisdom.

As reported, in April this year, Shell agreed to buy BG Group for $70 billion as part of the deal, BG shareholders will receive for each share by 3.83 per pound and 0,4454 shares of Shell. As a result, after completion of the transaction, BG shareholders will own approximately 19% of the shares of Shell.

In December, Shell has revised the value of the deal to $53 billion, the Shareholders will vote on January 27, BG – 28 January. For the transaction requires the approval of 50% of shareholders and 75% of investors BG.

The acquisition will enhance BG’s proved reserves of oil and gas, Shell 25%, production – 20%. The uptake of BG also further enhances Shell on the market of liquefied natural gas.