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Shell to Slash 2,200 More Jobs Amid Prolonged Oil Rout
Integrated energy major, Royal Dutch Shell plc is again about to reduce its headcount. This time, the company has decided to cut a minimum of 2,200 jobs – of which 475 workers are attached to exploration and production activities in the U.K. and Ireland – this year.
Considering this announcement, Shell is on the verge of slashing 5,000 jobs in 2016 and 12,500 headcount in the 2015–16 period. This is no longer a surprise given the unfavorable business scenario following the prolonged oil weakness. Data wise, although crude crossed the $50-per-barrel level for the first time this year, the commodity is nowhere near its above-$100-per-barrel level two years back.
Another event that forced Shell to cut headcount is its purchase of BG Group plc − a leading upstream energy player in the UK –earlier this year. In detail, with this acquisition the financials of Shell got hammered by a significant amount of debt.
Chevron Corporation (CVX - Free Report) and BP plc (BP - Free Report) are among major energy players that are walking on the same path as Shell. As per data compiled by Bloomberg, oilfield services giant Schlumberger Limited (SLB - Free Report) has slashed the largest number of jobs in U.S. this year.
As per a separate announcement by Bloomberg, Shell has submitted bids for operating Al-Shaheen field, the biggest oil field in Qatar and one of the biggest in the world. Other bidders are Chevron, ConocoPhillips (COP - Free Report) , TOTAL SA and Maersk Oil. Currently, Al-Shaheen produces 300,000 barrels of oil every day, almost 50% of the country’s daily oil production.
Headquartered in The Hague, the Netherlands, Shell is one of the largest integrated oil and gas companies in the world. It explores for and extracts crude oil, natural gas and natural gas liquids. It has interests in chemicals as well as in power generation and renewable energy.
Currently, Shell carries a Zacks Rank #3 (Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.
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