Shell plans to ''reduce supply-chain costs'' in downturn

18 March 2009

18 March 2009 | Martha McKenzie- Minifie

Oil giant Shell has said the recession has created opportunities for it to cut costs in the supply chain.

In his 2009 strategy update yesterday, chief executive Jeroen van der Veer said a pause in new activity - launching "very few" new projects in 2007-08 - combined with Shell's global scale gave new opportunities to reduce supply chain costs.

"The economic slowdown creates opportunities for Shell to reduce supply-chain costs, as spare capacity in the services industry comes into play," said van der Veer. "We don't have a crystal ball on oil prices, so we are planning on the basis that the downturn could last more than a year."

He acknowledged "testing times" for the oil and gas industry but confirmed a 5 per cent dividend increase and pledged to invest up to $32 billion in oil and gas projects.



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