. . . but Shell and BG Group still press ahead with their £36bn merger plan

ROYAL Dutch Shell revealed quarterly profits had nearly halved yesterday but received major backing for its deal with BG Group.

Shell said its fourthquarter profit will be down by around 40pc to between £1.1bn and £1.3bn and its fullyear earnings could drop to as low as £7.3bn for 2015 – well below the near £16bn it reported in 2014.

As markets plunged across the globe Shell’s shares plummeted 5.5pc or 74.5p to 1294.95p yesterday and BG’s fell nearly 3pc or 42.3p to 897p. Despite the chaos and the collapse in the oil price, Shell’s chief executive Ben van Beurden is proceeding with the proposed takeover.

Major shareholders have begun to publicly support the deal and yesterday, Norway’s sovereign wealth fund – the largest in the world – backed it.

Shell released its figures early to coincide with takeover target BG Group’s update. Shareholders will vote on the £36bn megadeal next week and full year results will be announced on February 4 and 5.

Gas specialist BG’s production volumes were 704,000 barrels a day – up 16pc on the previous year.

However its 2015 earnings of at least £1.6bn will be nearly half the £2.8bn it reported for 2014.

Michael Hewson, chief market analyst at spreadbetting firm CMC Markets UK, said: ‘What is more concerning is the recent declines in Shell’s share price has been accompanied by a rise in volumes, which suggests that investors are starting to lose confidence at a time when questions are increasingly being asked about the size of the price tag of the deal with BG.’

Analysts had expected BG and Shell’s fall in earnings.

Investment research firm Bernstein backed the merger saying: ‘With continued reduction of costs inside both companies in 2016 and market balancing now firmly on the horizon, the combined entity will be one of the key winners on the other side.’