Royal Dutch Shell has announced that it plans on slashing spending by scaling back its planned capital investment by $15 billion over the next three years, CNN reports.
United Kingdom-based IG Group analyst David Madden described the spending cuts to the site as "enormous" and mentioned that the company may be looking toward a more cautious financial platform in the future.
Although the recent decline in oil prices are said to be responsible for the company's fiscal move, the company assured investors and consumers that it is not acting too quickly given its unfavorable circumstances.
"Shell has options to further reduce spending, but we are not over-reacting to current low oil prices," the company said in a statement, CNN also reports.
Shell's fourth-quarter earnings report for financial year 2014 revealed that net income fell 57 percent to $773 million. This follows after the price of crude oil dropped by almost half its original price.
Part of the company's spending cuts includes the abandonment of the construction of a $6.5 billion petrochemical plant in Qatar, one of its largest partners.
"We plan to cap our organic 2015 spending at 2014 levels," Chief Executive Officer Ben van Beurden said, according to ABC News.
BP, one of Shell's main competitors within the oil market, is said to announce its own spending cuts. The company, which recently announced 300 job cuts, will report its fourth-quarter earnings next week.
