29 October 2009 22:23 [Source: ICIS news]
(Includes updates in paragraphs 1-3)
HOUSTON (ICIS news)--Some 5,000 employees are leaving oil giant Shell as a result of its cost-cutting measures for this year, company chief executive Peter Voser said on Thursday after the company announced its third-quarter profits had plunged.
Voser said the company cut operating costs by about $1bn (€680m) in the first nine months of the year as part of its “Transition 2009” programme.
The programme “is progressing well, and will be completed by the end of 2009”, Voser said. “Some 5,000 employees are leaving Shell as a result of these changes. This represents around a 10% reduction in employees in the redesigned divisions and corporate functions.”
Shell's group earnings for the quarter on a current cost of supply (CCS) basis were 72% lower at $3.0bn, with upstream earnings significantly lower at $1.5bn compared with $8.6bn in the third quarter of 2008.
“Our third-quarter results were affected by the weak global economy. Upstream and downstream profitability has been sharply reduced compared to year-ago levels,” Voser said.
Shell’s chemical segment on Thursday reported a 14% increase in third-quarter earnings on a current cost of supply basis to $169m due to improved income from investments, the oil giant said on Thursday.
The increase in chemical earnings came despite lower realised margins for the third quarter, Shell said in a statement.
Chemicals sales volumes fell by 5% to 4,723,000 tonnes compared with the same quarter last year, even though manufacturing plant availability increased to 95%, 9% higher than in the third quarter 2008, which was affected by hurricanes in the US, it added.
The weak global economy continued to have an impact on downstream volumes in the oil products and chemicals segments, the company said.
Shell's group earnings for the quarter on a CCS basis were 72% lower at $3.0bn, with upstream earnings significantly lower at $1.5bn compared with $8.6bn in the third quarter of 2008.
“Our third-quarter results were affected by the weak global economy. Upstream and downstream profitability has been sharply reduced compared to year-ago levels,” said Shell CEO Peter Voser.
“We see some indications that energy demand and pricing are improving, but the outlook remains very uncertain, and we are not expecting a quick recovery,” he added.
($1 = €0.68)
Additional reporting by Lucy Craymer
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