Energy major Royal Dutch Shell has decided to cut 6,500 jobs globally responding to the weakness in the crude oil prices, triggering concerns that it may downsize in India as well. But a spokesperson of its India arm dispelled such fears, clarifying that the company may not tinker with its India operations, and could even expand some of them.
The Anglo-Dutch company announced its plans to cut costs and staff after it reported a 37 per cent year-onyear decline in its net profit. Its chief executive officer Ben van Beurden said that it has decided to go ahead with the cost cuts to stay resilient at a time when oil prices are likely to remain muted. The CEO also said that the company was “planning for a prolonged downturn”.
But Shell’s India arm told ET that the company’s downsizing plans will not affect India. “There will be no impact in India as the group recently announced fresh investments in the country through the IT Centre that is coming up in Bengaluru and will provide over thousands of jobs over the next decade. The other businesses here are growing as well,” a spokesperson from the Indian arm responded to a query from ET.
Shell, which globally employs 100,000 people, has over 3,500 employees in India. Benchmark Brent crude for September is currently trading at below $50 a barrel, almost half the price in June 2014. Oil majors across the world have cut capex by up to 30 per cent. Shell has cut global capital expenditure twice in the year to $30 billion for 2015, which is $7 billion lower than previous year.
Shell has a diversified its presence in the Indian energy market. It manufactures and sells lubricants, sells bitumen, runs fuel retail pumps and leads a joint venture, Hazira LNG. Energy majors such as BP, Statoil and Total have cut their respective capital expenditure as the market faces supply glut even as demand remains muted.
Read more at: Economic times