Image: Royal Dutch ShellRoyal Dutch Shell has become the latest oil company to report a troublesome 2015 as oil prices continued to leave their mark on profits.
The Anglo-Dutch firm posted profits of $10.7 billion for the year, compared with $22.6bn in 2014. That follows a profit of $1.8bn in the final quarter of the year, also less than half the $4.2bn it reported in Q4 in 2014.
And those huge falls came despite the company cutting its capital spending by $8.4bn to $28.9bn, operating costs being cut by 10% and the sale of around $5.5bn worth of assets.
Earlier this week, BP announced a further 3,000 job cuts, on top of 4,000 cuts already planned, after its profits fell by around half in 2015.
Shell also revealed that it would cut operating costs by a further $3bn in 2016, and confirmed that it will be cutting 10,000 jobs as part of its takeover of BG Group. Shareholders approved the takeover last week. But there are some that still have big concerns over the deal.
In January, Standard Life - one of Shell's key investors - said it would oppose the deal because oil prices were not high enough to make the deal viable. The company said oil prices needed to be at least $60 per barrel for the deal to benefit Shell, but they have dropped dramatically since the start of the year to around $30 per barrel.
Tumbling prices
The entire oil and gas industry has been hit by falling oil prices, and they've been hit hard. In June 2014, Brent crude oil was trading at around $115 per barrel. By the end of that year, they'd fallen to around $60 per barrel. At the time, that was seen as a significant collapse in prices, and one that was going to hit the industry quite considerably.
It didn't stop there. Oil prices spent much of 2015 teetering between highs of $60 and lows of $40, before ending the year at the bottom end of that scale. Having fallen by around 70% from the summer of 2014, prices dropped a further 20% in the first few weeks of 2016 alone.
