23rd Dec 2015 06:25
THE HAGUE (Alliance News) - Royal Dutch Shell PLC said that it expects 2016 capital investment for the combination of Shell and BG Group PLC to be around USD33 billion in current market conditions, USD2 billion lower than previous guidance of USD35 billion. It marked a reduction of around 30% from the combination of Shell and BG in 2014, which on a combined group basis was USD47 billion.
Shell's operating costs are expected to fall by USD4 billion in 2015, a reduction of around 10% from 2014 levels of USD45 billion. Shell's costs should be reduced by a further USD3 billion in 2016, marking a reduction of USD7 billion in 2015 and 2016 combined, or 15% from a 2014 baseline. This reflects Shell's industry-leading actions to reduce costs on a sustainable basis. These figures exclude cost synergies potential from the combination with BG.
2015 capital investment is expected to be around USD29 billion, a reduction of USD8 billion, or over 20% from 2014 levels, and lower than our previous guidance of USD30 billion.
At the same time, Shell said it is continuing to invest to complete its post- final investment decisions or FID projects. These should add material cash flow and free cash flow in the medium term, with more than 700,000 barrels of oil equivalent per day and 9.7 million tonnes per annum of LNG under construction for 2016-2019 start-up. BG's portfolio should bring further growth potential, at a competitive cost.
Copyright RTT News/dpa-AFX
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