Shell on Friday announced that it has suspended the Final Investment Decision (FID) on the $12bn Bonga South-West project in Nigeria due to the declining prices of crude oil in the global market.

The company had reported that its profit dropped by 56 % in Q4 of 2015 compared to 2014, and its revenues decreased by 80 % to $3.84bn, from $19bn in 2014.

According to the CEO of Shell Plc, Ben van Beurden, the purchase of BG Group, which is expected to be finalized in a few weeks, signifies the beginning of a new period in Shell, reviving the company as well as improving shareholders’ profits.

“We are making substantial changes in the company, reorganising our upstream, and reducing costs and capital investment, as we refocus Shell and respond to lower oil prices. As we have previously indicated, this will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies,” he said.

Beurden disclosed that in 2015, the company considerably reduced expenses by cutting the number of new investment decisions and planned lower-cost development solutions but for this year, they withdrew from the Bab sour gas project in Abu Dhabi, and are suspending FIDs on LNG Canada and Bonga South West in deep-water Nigeria.

He added that operating expenses and capital investment have been cut by an overall $12.5bn compared to 2014, and further cutbacks are expected, should circumstances permit that, Punch reports.

Anita Fatunji