Shell cuts spending

Oil company Shell reacts to the current oil price slump by cutting investment over the next three years.

Anglo-Dutch energy group Shell announced Thursday it would reduce potential capital investment by "over $15 billion" (13.2 billion euros) until 2017 in response to the plunge in oil prices.

Shell Chief Executive Ben van Beurden said in a statement that the company was taking a "prudent approach" to current market developments, making sure not to "over-react" to the recent fall in oil prices.

"Shell is taking structured decisions to balance growth and returns," he added.

Crude oil prices fell by about 50 percent over the past six months, forcing oil companies around the world to review previous investment decisions. Shell is the first oil major to put an exact figure to its cost savings after reporting a massive drop in earnings at the end of last year.

Shell's fourth-quarter net profit plunged 57 percent to 773 million compared with the final three months of 2013, as earnings were impacted by the "significant decline in oil," the company said in its 2014 report released on Thursday. For the whole year, profit after tax had dropped to $15.05 billion in 2014.

Nevertheless, CEO Beurden said Shell was "well positioned for the current oil market downturn" to handle the decline in prices. He announced dividends to the tune of $12 billion for 2014, which was $0.47 per share, equal to shell's 2013 dividend.

On Monday, rival BP said it would freeze pay across the company to deal with plummeting oil prices.

uhe/ng (Reuters, AP, AFP)