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Royal Dutch Shell Plc announced on Thursday plans to slash 6 500 jobs as it steps up cost savings after second-quarter profit fell sharply but still topped analysts projections due to strong performance at its downstream business.

The company reported a 37% drop in Q2 earnings to $3.835 billion on a current cost of supplies basis excluding identified items, its definition of net income, from $6.13 billion a year earlier. Still, this marked an improvement from first-quarter earnings of $3.25 billion and exceeded analysts projections for a drop to $3.18 billion.

Shell said it was planning more asset disposals and spending cuts as it presses ahead with its proposed $70-billion acquisition of rival BG Group – the companys largest purchase and the industrys biggest deal in more than a decade. Asset sales are expected to reach a combined $20 billion for 2014 and 2015 and total $50 billion by 2018.

The Anglo-Dutch group also announced on Thursday the sale of a one-third stake in Showa Shell to Japans second-biggest refiner Idemitsu for $1.4 billion and said it expects to cut 6 500 jobs in 2015. It also slashed its full-year capital investment outlook for the second time this year to $30 billion, down by 20% from a year earlier.

This follows a similar move by BP Plc which earlier in the week cut its capex forecast to below a previously projected $20 billion this year. Shell added it expects operating costs to decline by $4 billion, or 10%, this year as a result of its efforts to bolster its balance sheet, followed by a further reduction in 2016.

The oil company said it remains on track to combine with BG Group, having already received regulatory approval from the US, Brazil and South Korea, and pending such from Australia, China and the European Union. Meanwhile, it is also pressing ahead with plans to drill in the the Arctic this summer and earlier in July it approved development of its deep-water Appomattox oil field in the Gulf of Mexico.

Like other oil majors, Shells performance has suffered from the past years steep drop in crude prices, which fell from $110 per barrel a year earlier to about $60 in the second quarter and are currently near $53 per barrel. Profits from exploration and production, or the so-called upstream business, slid 78% to $1 billion and its Americas arm registered a loss.

However, similar to its main competitors, Shell managed to offset these losses thanks to improved refining margins which helped profits at the downstream arm more than double to $3 billion from $1.3 billion a year earlier. The oil major said it remained committed to its dividend program, confirming full-year payouts of $1.88 per share for 2015 and at least as much next year.

“We have to be resilient in a world where oil prices remain low for some time, whilst keeping an eye on recovery,” said Chief Executive Ben van Beurden. “Were taking a prudent approach, pulling on powerful financial levers to manage through this downturn, always making sure we have the capacity to pay attractive dividends for shareholders.”

Royal Dutch Shell B shares traded 3.60% higher at GBX 1 841 per share at 09:50 GMT in London, trimming a year-on-year drop to 26.03%.

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