Shell prepares for next chapter

Shell logos on petrol pumps at a petrol station in London, as Royal Dutch Shell insisted its takeover of BG Group heralds the start of a "new chapter"

Shell said full-year earnings fell to £2.6bn in 2015 from £13bn in 2014 after it was hammered by the recent collapse in oil prices.

On an underlying basis, full-year earnings fell 53 per cent to £7.3bn.

Shell, which had braced the City for a sharp fall in figures last month, said it has been slashing costs and leading an overhaul to offset the oil price rout, but added it was ready to take further action if needed.

Chief executive Ben van Beurden said: "The completion of the BG transaction, which we are expecting in a matter of weeks, marks the start of a new chapter in Shell, rejuvenating the company and improving shareholder returns."

The group stripped out £2.7bn from the business - around 10 per cent - in 2015 and plans to cut a further £2.1bn this year.

It has also confirmed more than 10,000 jobs will be axed as part of the BG tie-up and it is planning to offload £20.6bn of assets.

Mr van Beurden said: "Shell will take further impactful decisions to manage through the oil price downturn, should conditions warrant that."

The results come less than two weeks before Shell is due to complete its mammoth takeover of BG on February 15 after the deal was given the green light by shareholders last week.

Shell's figures also follow those of rival BP, which two days ago reported its largest annual loss for at least 20 years and revealed another 3,000 job losses.

The oil sector has been battered by the cost of crude, which slumped below 28 US dollars a barrel at one stage last month and has collapsed by more than 70 per cent since a peak of around 115 US dollars a barrel in the summer of 2014.

Shell said it was "making substantial changes in the company" in response to the oil price declines, although the industry is hoping for a rebound later this year.