* Shell could sell more U.S. shale projects
* No need to reinvent the company, says new CEO
* Asset disposal plans remain unchanged
By Karolin Schaps and Dmitry Zhdannikov
LONDON, March 13 (Reuters) - Royal Dutch Shell willcut spending by a fifth and lay off staff at its Americanexploration and production business, the company said onThursday, in another sign that oil majors are struggling toprofit from the booming U.S. shale sector.
Oil and natural gas pumped from North American shale haveproved a boon for many smaller energy businesses, but theworld's biggest oil companies, including BP and ExxonMobil, have had less success unlocking the prolificrock's full potential.
London-based BP announced last week that it is to spin offits onshore U.S. oil and gas assets into a separate business toimprove performance.
"Financial performance there is frankly not acceptable ...some of our exploration bets have simply not worked out," saidBen van Beurden, who was head of refining before being promotedto Shell's top job at the start of the year.
Oil companies active in North American shale have broadexposure to profit-sapping U.S. natural gas, prices of whichfell to their lowest in a decade during 2012 but rebounded as acold winter depleted gas in storage.
PROFIT PLUNGE
Sentiment on the outlook for the fuel is improving with theprospect of liquefied natural gas (LNG) exports and increasedindustrial use, but uncertainty remains.
The spending cuts announced on Thursday follow Shell'sdecision in January to suspend its controversial Arctic drillingprogramme and pledge to cut capital expenditure and streamlineoperations worldwide after the company's least profitable fourthquarter in five years.
"I don't think it is a matter of trying to reinvent thecompany in a fundamentally different way; it is a matter oftackling some of the issues that we know need tackling," vanBeurden told journalists on a conference call after Thursday'sstrategy update.
The Anglo-Dutch oil major is sticking to its 2014/15 assetdivestment target of $15 billion, of which $4.5 billion hasalready been announced.
It also said that it is too soon to say whether capitalexpenditure will decline next year from the planned $35 billionthis year.
Shares in Shell were down 0.3 percent at 1431 GMT, against a0.2 pct dip for the blue-chip FTSE 100 index.
JOB CUTS
Shell, which is already selling more than 700,000 acres ofU.S. shale assets, said it will cut permanent staff andcontractors in North American onshore oil and gas exploration by30 percent.
The intent is to reduce headcount this year by about 400Shell staff to about 1,400 people, many of whom will beredeployed to higher priority projects, a Shell spokeswomansaid. The number of contractors working in this area for Shellis smaller than the number of permanent staffers, she added.
The company last year lost $900 million in its upstreamAmericas unit.
Shell owns shale gas acreage in the Mercellus shale inPennsylvania, Texas, Colorado and Kansas, more of which it saidit may have to sell.
Besides the Americas, global downstream operations alsoremain a drag on business because of low refining margins aswell as oil theft in Nigeria that cost the company close to $1billion last year.
Shell is also involved, together with Exxon Mobil,Total, Eni and KazMunaiGas, in the giantKashagan oil field in Kazakhstan, which has been plagued bystart-up problems.
Shell said the field had the potential of generating $1billion in annual cashflow for the company but acknowledged thatthe production outlook remains unclear.
Van Beurden added that Shell operations in Ukraine, where ithas a number of pump stations and early exploration works, havenot been affected by the country's dispute with Russia and thatMoscow's intervention in Ukraine has so far had no impact on thecompany's investment decisions in Russia.
