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Shell Announces £9.9bn Cut in Global Spending

The comments came as Shell unveiled results showing a 12% rise in underlying profits to 3.26 billion US dollars (£2.15 billion) for the final quarter of 2014. The performance was boosted by recent efforts to restructure its downstream operation, as well as increased output of higher-margin products.

However, profits for its upstream exploration and production division still fell by 30% to 1.73 billion US dollars (£1.14 billion) in the quarter.

Chief executive Ben van Beurden said: "We are taking a prudent approach here and we must be careful not to over-react to the recent fall in oil prices.

"Shell is taking structured decisions to balance growth and returns."

Royal Dutch Shell's shares were more than 3% lower as the profits figure for the final quarter of 2014 came in below City expectations. The company, which employs 90,000 people in more than 70 countries, still made profits of 22.5 billion US dollars (£14.9 billion), a rise of 16% on a year earlier.

Last week Shell abandoned a 6.5 billion US dollars (£4.3 billion) plan to build one of the world's biggest petrochemical plants in Qatar with rival Qatar Petroleum. Shell said the cost of the plant made it ''commercially unfeasible, particularly in the current economic climate prevailing in the energy industry".

This move came amid a flurry of activity among oil producers to scale back new investment in light of oil prices that have dropped by more than half since the summer. Mr van Beurden added: "Our strategy is delivering, but we're not complacent. Weaker oil prices underline that there's a lot more to do. The three themes of financial performance, capital efficiency and project delivery will remain as Shell's priorities in 2015."

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