Shell CEO: The World Will Need More Oil

During an interview with FOX Business Network’s Maria Bartiromo, Royal Dutch Shell’s (NYSE:RDS.A) CEO Ben van Beurden said the company is responding with “vigor and determination” to cope with lower oil prices.

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“We started off the slide in oil prices with a low gearing 12.4%. Since then, we have been cutting our operating costs, our capital spent quit considerably -- $4 billion OPEX, $7 billion capital costs -- that’s about a year of dividends that we have saved in a year’s time,” he said

Despite cutting costs, van Beurden says the dividend is safe.

“We did a very significant deal [BG Group acquisition] at a time of uncertainty in the markets. I think it’s very difficult for the ordinary investor to understand what is happening and what this deal means… I felt I needed to bring an assuring message out at as well -- that the dividend is basically guaranteed for this year at $1.88 per share,” he said.

He also discussed what the Iran nuke deal means for the global oil market.

“It’s a little bit hard to predict for an outsider because we’ve been out of Iran for a long time, what will actually happen. A lot of talk about a million barrels of new oil coming on. But actually the world is going to need that million barrels. That’s the sort of, that’s less than 1 year demand growth and on top of it you see shrinkage in supply every year --  three to four million barrels a day of shrinkage in supply at $60 oil.”