Shell to cut refining capacity by 15 per cent, axe another 1,000 jobs

Royal Dutch Shell will sell 15 per cent of its refinery capacity in Europe and the Americas and cut a further 1,000 jobs after reporting a slump in annual profits on the back of a 75 per cent drop in profit the October-December 2009 quarter.

Shell reported a 75-per cent fall in fourth-quarter 2009 earnings to $1.2 billion compared with a 33 per cent increase in profits at rival BP.

The company, however, announced a 5-per cent increase in the final-quarter dividend, but said the next three-monthly payout would be held steady at $0.42 per share.

Shell said its full-year 2009 earnings fell 69 per cent to $9.8 billion.

Shell, which cut some 5,000 jobs or 10 per cent of its workforce (See: Shell to cut 5,000 jobs after poor Q3 results) and reduced its underlying operating costs by some $1 billion in the fourth quarter 2009, and by over $2 billion in 2009 as a whole, said it would slash another 1,000 jobs and reduce underlying costs by another $1 billion in the current year. 

"For 2010, we are targeting a further underlying cost reduction of at least $1 billion, and a reduction of some 1,000 employees," Peter Voser, chief executive of Shell, said, adding that much of that would come from downstream and ongoing cost cutting initiatives.