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Shell misses profit forecasts, to cut spending in face of lower oil prices

Shell misses profit forecasts, to cut spending in face of lower oil prices
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Royal Dutch Shell is the latest major energy firm to miss its profit forecasts, which pushed its shares down on Thursday.

Shell, which is the largest such company in Europe, blamed a number of one-off items, including losses from foreign currency fluctuations as well as exploration write-offs in North America and increased estimates of how much it will have to pay to decommission oil rigs in the future.

It stressed those one-offs were unlikely to be repeated but announced a three-year, $15 billion cut in spending – canceling and deferring projects – to help it cope with the plunge in oil prices.

Lower income from oil and gas production was offset by a near tripling of earnings from its refining and trading division.

Shell maintained its fourth-quarter dividend unchanged from the previous quarter and in a rare move pledged to pay the same amount in the first quarter of 2015. It has never cut its dividend since 1945.

Oil majors, including rivals BP and Total, have said they do not intend to cut their dividends, a key attraction for investors, even if oil prices remain low.

Benchmarks Brent crude and WTI have fallen to below $50 per barrel because of weak global demand and a boom in US shale production.

OPEC in November decided not to cut output as the group of oil producing nations hopes to force other producers to trim production by keeping prices low.