Shell Plans 6,500 Job Losses This Year

Royal Dutch Shell has announced plans to cut 6,500 job losses this year as a result of the collapse in world oil prices.

The London-listed oil firm warned that it was "planning for a prolonged downturn" in prices, lasting several years, as it moved to slash costs for 2015 by 10%, or £2.6bn.

It said that its investment plans for the year were also being scaled down, by £4.5bn, and it expected to cut more in 2016.

The company made the announcement as it confirmed half-year pre-tax profits of £5.2bn - down 16%.

Chief executive Ben van Beurden said: "We have to be resilient in a world where oil prices remain low for some time, whilst keeping an eye on recovery."

The cost of oil slumped over a year ago - dropping more than 50% to an average of $62 for a barrel of Brent Crude in the second quarter of this year.

The slump can be attributed to falling global demand, particularly amid the slowdown in China and in many emerging markets, and soaring production of shale oil in the US.

Major producing nations have refused to slash output to prop up prices to protect their market share from the US challenge.

The cost of Brent crude currently stands at $53-per barrel.

It was the first time that Shell had put a number on total job cuts for 2015. It had previously said 500 North Sea-facing role would go in the UK.

Mr van Beurden said Shell was making good progress on its planned £47bn takeover of BG.

He said Shell was aiming to become a "simpler and more profitable company" - and after the transaction would cut spending on exploration while reviewing the way it invests capital in long-term projects and disposing of assets.

"These are challenging times for the industry, and we are responding with urgency and determination, but also with a great sense of excitement for the future."