Shell, Statoil Post Lower Q4 Profit

European oil giants Royal Dutch Shell plc and Statoil ASA are the latest companies to show how badly they have been affected by the lower oil price environment, after they posted steep declines in their fourth-quarter profits last week. The poor results come after BP Plc and Exxon Mobil Corp. posted similarly-disappointing performances last Tuesday. Shell posted a profit of $1.9 billion in 2015, which was 87 percent less than the $14.8 billion income registered in 2014. The company’s full-year 2015 cash flow from operating activities was $29.8 billion (2014: $45 billion) and cash flow from operating activities for the full year was $24.3 billion (2014: $38.6 billion). Shell’s capital investment was $28.9 billion in 2015, which was $8.4 billion lower than 2014. Combined capital investment for Shell and BG following the completion of their merger, which will be executed in “a matter of weeks”, according to Shell CEO Ben van Beurden, is expected to be $33 billion for the full year in 2016 – down 45 percent from combined spending which peaked in 2013. In addition to the spending cuts, Shell warned that it retains flexibility for further reductions “should conditions warrant this”. Shell’s operating costs for the full year 2015 decreased by $4.1 billion, to $41.1 billion, and the company’s costs are expected to fall again in 2016, by a further $3 billion. Statoil recorded an income of NOK 14.9 billion ($1.75 billion) for 2015, which was 86-percent less than the company’s profit of NOK 109.5 billion ($12.8 billion) in 2014.