United Kingdom – Shell plans to scale back its oil and gas exploration and development workforce by 20% as CEO Wael Sawan widens his cost-saving drive to the highly profitable division after deep cuts in renewables and low-carbon businesses.
The restructuring in the exploration and well development and underground units will see hundreds of jobs cut worldwide, particularly in the Houston, Hague and to a lesser extent UK offices, Shell confirmed to Reuters.
The planned 20% reduction are subject to consultations with employee representative bodies.
Shell’s oil and gas production division, known as upstream, which includes the exploration and well development units, accounted for over one third of the company’s $28.25 billion in adjusted earnings in 2023.
Exploration is vital for oil and gas companies in order to replenish depleting reserves and discover new resources that, if developed, can be highly profitable. Shell in recent years made significant discoveries in Namibia which it is now studying for potential development.
‘Shell aims to create more value with less emissions by focusing on performance, discipline and simplification across the business. That includes delivering structural operating cost reductions of $2-3 billion by the end of 2025,’ Shell said in a statement.
Sawan, who took office in January 2023, has vowed to improve Shell’s performance to boost profitability and narrow a wide gap in its shares valuation compared with larger U.S. rivals.
