Subdued oil prices caused by a supply glut are continuing to hurt profits at Royal Dutch Shell.
Shell has reduced its key investment forecast by a further 10% or $3bn after announcing a sharp drop in first quarter profits amid the depressed oil price environment.
The FTSE 100 firm said “hugely challenging times” for the energy sector drove net profits 89% lower to $484m (£334m) during the period.
Underlying profits, which exclude one-off items, fell 54% to almost $1.6bn (£1.1bn) compared to the same three months in 2015. Shares fell 2%.
The BG tie-up increases the company’s reserves of oil and natural gas by 25% – with the gas element particularly attractive for Shell.
Ben van Beurden said: “The completion of the BG deal has reinforced our strategy and strength against the backdrop of hugely challenging times for our industry”.
Shell is not alone in feeling the pain from the low oil price environment – caused by over-production at a time of weak demand in the global economy.
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