THE new boss of Royal Dutch Shell today said the oil giant must “sharpen up in a number of areas” after the company reported a 48 per cent slide in profits.
Ben van Beurden, who took the helm on January 1, highlighted lost momentum in Shell’s operational delivery but said its overall strategy was robust.
He plans to cut the company’s capital spending - resulting in some “hard choices on new projects” - to focus on improving returns.
His comments were made alongside annual results which confirmed the company’s warning earlier this month about a poor final quarter of the year.
Profits for the three-month period slumped to 2.9bn US dollars (£1.75bn) from 5.6bn US dollars (£3.4bn) a year earlier, with the full-year figure down 23 per cent to 19.5bn US dollars (£11.8bn).
Shell will reduce capital spending from 46bn US dollars (£27.8bn) last year to around 37 billion US dollars (£22.4bn) and will halt exploration activities in offshore Alaska as a result of opposition from a US court.
The worsening security situation in Nigeria, where the company has a long-term presence, weak refining margins and low natural gas prices in North America have increased the pressure on Shell’s performance.
Mr van Beurden said: “Our ambitious growth drive in recent years has yielded a step change in Shell’s portfolio and options, with more growth to come, but at the same time we have lost some momentum in operational delivery, and we can sharpen up in a number of areas.”
The Dutch national rose through the ranks over three decades before securing the top post, beating competition from internal and external candidates.
He said the company will step up the pace of asset sales to around 15bn US dollars (£9.1bn) in the next year in both exploration and downstream.
Mr van Beurden said: “We are making hard choices in our worldwide portfolio to improve Shell’s capital efficiency.”