Royal Dutch Shell will exit oil and gas operations in up to 10 countries in a drive to deepen cost cuts as it weathers weak oil prices and has to pay down debt following its $54 billion acquisition of BG Group.
The company is active in more than 70 countries and said it would like to focus on 13 important nations where it is making good returns, including Brazil, Australia and the United States, Reuters reported.
"Our portfolio is probably more diverse and spread around the world, and in some parts more mature, than we would like it to be," Shell's chief financial officer, Simon Henry, told reporters on Tuesday. The move, which includes the sale of 10% of its oil and gas production assets, will make Shell a smaller company that offers investors access to a more gas-heavy portfolio than some of its rivals such as Exxon Mobil.
The Anglo-Dutch company outlined plans to target annual spending of $25 billion to $30 billion until the end of the decade, or less if oil prices remain below $50 a barrel.
It lowered its planned 2016 capex to $29 billion, with exploration set at $2.5 billion, in a third cut from an initial $35 billion and raised its target for savings from the integration of BG to $4.5 billion, up $1 billion from previous guidance.
A main source for cost savings, including 12,500 job cuts this year, will come from overlaps in operations in areas including Australia, Brazil and the North Sea.
