You are here
NEW YORK -- Executives at Royal Dutch Shell Plc expect pressure on refining margins and high costs to persist next year as the economy stays "challenging," according to a report by Bloomberg News.
"I expect that 2010 will be, from a macro environment point of view, still a challenging year," Peter Voser, Shell's CEO said in a video to employees. "We'll see pressure on refining margins and some further pressure on competitive performance regarding costs."
Shell and other major oil companies are cutting costs as they work to rebuild profits hit by the global recession and lessened energy demand. Shell's refining earnings fell 47 percent in the third quarter, Bloomberg noted.
The oil company has cut 5,000 jobs, approximately 5 percent of its workforce, and reduced operating costs by $1 billion in the first nine months of 2009 Bloomberg News reported.
Voser plans to streamline operations, noting it is "too complex." The CEO is overseeing a reorganization called Transition 2009.
"I was very positively surprised by how you kept your eyes on the operational performance -- on the day-to-day job you had to do -- while going through the uncertainties of the last few months," Voser told employees. "We're closing Transition 2009 in 2009. What we're doing now is actually embedding what we want to achieve with the restructuring into the plans and your activities in 2010."
Shell placed 15 percent of its refinery capacity, equal to about 600,000 barrels a day, under review.
Valero CEO: Improvement Ahead, Margins Remain Low
United Refining Sees Net Sales Fall, Gross Profits Rise