Shell has announced it is postponing final investment decisions on LNG Canada and Bonga South West in deep water Nigeria.
The announcement comes after Shell’s profit shrank 44 percent to $1.8 billion as a result of the oil bust. Oil companies from Exxon Mobil Corp. to ConocoPhilips Co., are struggling to maintain growth investments and shareholder payouts as the crude collapse slashes earnings.
The Hague-based company is hoping its $50 billion acquisition of BG Group Plc, effective on Feb.15, will help it maintain dividends and increase oil and gas production at a time when cash flow is shrinking.
“[Its completion] marks the start of a new chapter in Shell, rejuvenating the company and improving shareholder returns,” Chief Executive Officer Ben Van Beurden said in a statement. “Shell will take further impactful decisions to manage through the oil-price downturn, should conditions warrant that.”
The company is hoping to reach its break-even point, about $60 a barrel, soon. BP reiterated this week it would be able to balance its books if oil returns to that level in 2017.
Shell will continue new projects, including liquefied natural gas in Australia, according to Chief Financial Officer Simon Henry.
Article written by HEI contributor Aliyah Cole.