Shell sees full year earnings in range of $10.4-10.7bn

Shell said it expected full year 2015 earnings on a current cost of supplies basis excluding identified items to be in the $10.4bn (£7.3bn) – $10.7bn range.

In a trading update, the company said capital investment last year is expected to be 20% lower at $29bn as a result of efficiency improvements and more selectivity on new investments. Capital investment for Shell and BG combined in 2016 is currently expected to be $33bn, around a 45% reduction from combined spending.

Production for the fourth quarter 2015 was 3m barrels of equivalent per day (boepd), and for the full year 2015 2.9m boepd.

The company said identified items for the fourth quarter 2015 are expected to be in the range of a net charge of $0.2bn to an immaterial gain, mainly reflecting gains on sale of assets and impairments; and for the full year 2015 are expected to be a net charge of some $6.8bn – 7bn.

Income attributable to shareholders is expected to be in the region of $0.6bn – $1bn for the fourth quarter 2015 and for the full year 2015 expected to be in the region of $1.6 – $2bn.

Cash flow from operating activities for the fourth quarter 2015 is expected to be in the region of $4.8bn – $6bn and for the full year 2015 expected to be in the region of $29.2bn – $30.4bn.

Chief executive Ben van Beurden said operating costs had been reduced by $4bn, or around 10% in 2015, and the company expects costs to fall again in 2016 by a further $3bn with extra savings from the merger with BG on top of that figure.

“Together, these actions will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies, as streamlining and integration of the two companies continue,” he said.