Oil major Royal Dutch Shell has posted a 72 per cent slide in profits for its latest quarter as the industry continues to battle low oil and gas prices.
The group said adjusted earnings tumbled from $3.76 billion (£2.85bn) to $1.05bn as chief executive Ben van Beurden flagged the “significant challenge” lower energy costs are posing.
He said: “Downstream and integrated gas businesses contributed strongly to the results, alongside Shell’s self-help programme. However, lower oil prices continue to be a significant challenge across the business, particularly in the upstream.
“We are managing the company through the down-cycle by reducing costs, by delivering on lower and more predictable investment levels, executing our asset sales plans and starting up profitable new projects.”
The results follow news earlier this week of a big fall in earnings at rival BP.
Shell, which completed a $50bn acquisition of BG Group earlier this year, is embarking on a major cost-cutting drive. The firm said in June that spending will be slashed by 35 per cent to between $25bn and $30bn over the next four years.
The firm also expects to make efficiency savings from the tie-up with BG and is planning a series of asset disposals.
Shell is proposing a second quarter dividend payment of $0.47 per share.