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Shell is looking to reduce its oil and gas exploration workforce by 20%, reported Reuters, citing sources.
The news comes as CEO Wael Sawan makes cost-saving measures to the upstream division, which significantly contributes to the company’s earnings.
According to sources, the planned cuts will affect offices globally, notably in Houston, the Hague and Britain.
The redundancies are pending consultations with employee representatives.
The upstream division, encompassing exploration, well development and subsurface units, made up more than a third of Shell’s $28.25bn (£21.45bn) adjusted earnings for 2023.
Shell’s recent discoveries in Namibia are currently under evaluation for development prospects.
Sawan, who assumed his role in January 2023, is committed to enhancing Shell’s performance.
The strategy involves expanding its liquefied natural gas division, maintaining steady oil production and concentrating on the most profitable segments.
In recent months, Shell has scaled back its renewable energy ventures and divested from retail power, refineries, and certain oil and gas production assets, including those in Nigeria.
The company has also revised its carbon reduction targets due to strong gas demand forecasts and uncertainties in the energy transition.
In a separate move, in the US, Shell has agreed to sell its interests in the Sinco pipeline system and Colex terminal to an Edgewater Midstream subsidiary.
With the sale of its Deer Park Refinery stake to Pemex in 2022, these assets were deemed non-strategic for Shell.
Shell Pipeline Company and Triton West, both Shell subsidiaries, fully own the Sinco pipeline system and Colex terminal, respectively.
Shell executive vice-president for trading & supply Andrew Smith said: “This sale follows our guidance at Shell’s Capital Markets Day to continue to simplify our portfolio as we seek to deliver more value, with less emissions.
“After the completion of the sale of Shell’s equity in Deer Park Refinery, these assets are non-integrated and no longer fit within Shell’s Powering Progress strategy. This transaction enables redeployment of capital to other projects that will do so.”
