LONDON - Royal Dutch Shell is looking to slash up to 40% off the cost of producing oil and gas in a major drive to save cash so it can overhaul its business and focus more on renewable energy and power markets, sources told Reuters.
Last year, Shell's overall operating costs came to $38 billion and capital spending totalled $24 billion.Shell is exploring ways to reduce spending on oil and gas production, its largest division known as upstream, by 30% to 40% through cuts in operating costs and capital spending on new projects, two sources involved with the review told Reuters.
For downstream, the review is focusing on cutting costs from Shell's network of 45,000 service stations - the world's biggest - which is seen as one its "most high-value activities" and is expected to play a pivotal role in the transition, two more sources involved with the review told Reuters.
Speaking to analysts on July 30, Shell Chief Executive Ben van Beurden said Shell had launched a programme to "redesign" the Anglo-Dutch company.Shell wants to cut jobs and reduce management layers Shell's operating costs, which include production, manufacturing, sales, distribution, administration and research and development expenses, fell by 15%, or roughly $7 billion, between 2014 and 2017.
Van Beurden said in July that Shell was on track to deliver $3 billion to $4 billion in cost savings by the end of March 2021, including through job cuts and suspending bonuses.Schlumberger is slashing its global workforce, but workers in 1 country say the company is taking advantage of weak labor laws to stiff them of fair severance
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