Shell to Cut Up to 9,000 Jobs -- Update
September 30 2020 - 3:33AM
Dow Jones News
By Adria Calatayud
Royal Dutch Shell PLC said Wednesday that it expects to cut
between 7,000 and 9,000 jobs by the end of 2022, as the company
said it expects to book charges of between $1.0 billion and $1.5
billion in the third quarter.
The oil major said the job reductions include 1,500 people who
have agreed to take voluntary redundancy this year. Shell employs
around 83,000 people, according to FactSet.
Shell said measures to simplify its organization will deliver
annual savings of between $2.0 billion and $2.5 billion by 2022,
which will partially contribute to its plan to reduce underlying
operating costs by between $3.0 billion and $4.0 billion by the
first quarter of 2021.
Chief Executive Ben van Beurden said Shell's streamlining plan
will focus on reducing its refining footprint to fewer than 10
sites, keeping those sites that are strategically essential in key
locations. The company's upstream operations will focus on
accelerating value and generating cash, while integrated gas will
seek to unlock new and expand existing markets for liquefied
natural gas, or LNG, Mr. Van Beurden said.
Shell said it expects third-quarter upstream production to be
between 2.15 million and 2.25 million barrels of oil equivalent a
day, including an impact of 60,000 to 70,000 barrels of oil
equivalent a day from hurricanes in the U.S. Gulf of Mexico.
Refinery utilization for the quarter is expected to be between
64% and 68%, and realized gross refining margins are expected to be
significantly lower than in the second quarter, the company said.
Sales volumes of oil products are expected to be between 4 million
and 5 million barrels a day, Shell said.
Shell said adjusted earnings from its integrated gas operations
will be hurt in the third quarter by a one-off tax charge in the
range of $100 million to $200 million. The company expects an
adjusted loss from upstream operations, similar to the second
quarter.
Third-quarter oil-products adjusted earnings will be hurt by
between $200 million and $400 million due to higher volume-driven
activity, phasing of maintenance activities and provisions, but
this will be partly mitigated by a one-off deferred tax benefit of
around $100 million, Shell said. In the company's chemicals
operations, adjusted earnings are expected to take a $100 million
hit from increased activity, provisions and phasing of maintenance
activities.
Integrated-gas production for the third quarter is expected to
be between 820,000 and 860,000 barrels of oil equivalent a day, and
LNG liquefaction volumes are estimated to be between 7.9 million
and 8.3 million tons, with trading and optimization results
anticipated to be below average, the company said.
Chemicals manufacturing plant utilization is expected to be
between 79% and 83%, with chemicals sales volumes forecast to be
between 3.7 million and 4.0 million tons, Shell said.
Write to Adria Calatayud at adria.calatayud@dowjones.com
(END) Dow Jones Newswires
September 30, 2020 03:18 ET (07:18 GMT)
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