LONDON (Alliance News) - Royal Dutch Shell PLC on Tuesday said it has upgraded its outlook on cost synergies to be achieved from the BG Group PLC takeover and said it has delivered a competitive underlying performance within the low oil price environment.
Shell said it has upgraded its annual cost synergy target for the BG takeover to USD3.5 billion, a USD1.0 billion, or 40%, increase on its previous target of USD2.5 billion. It said the transaction remains on track to close in early 2016.
Shell also said it has delivered a competitive underlying performance within the low oil price environment and said its cash flow has been sufficient to cover by its net investment plans and its dividend costs in the year to date.
It also said it is delivering on its commitments to cut around USD11.0 billion in annual costs and spending by the end of the year and said the restructuring of its upstream business will increase accountability for performance.
"Low oil prices are driving significant changes in our industry," said Shell Chief Executive Ben van Beurden, in a statement due to be given at the company's management day in London. "I am determined that Shell will be at the forefront of that, and emerge as a more focused and more competitive company as a result."
Shell 'A' shares were up 0.6% to 1,718.00 pence on Tuesday morning, while Shell 'B' shares were up 0.6% to 1,725.50p. BG shares, meanwhile, were up 1.2% to 1,041.50p, one of the best performers in the FTSE 100.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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