Royal Dutch Shell cut spending plans further and promised increased savings following its record purchase of BG Group, as Europe's largest oil company continues to adjust to the slump in energy prices.

Shell will spend $29 billion this year, it said Tuesday. That compares with a May forecast for capital expenditure “trending toward” $30 billion, which was itself down from an earlier projection of $33 billion.

Synergies from the BG acquisition will provide $4.5 billion in savings in 2018, up from an earlier estimate of $3.5 billion.

Chief executive officer Ben Van Beurden, who staked his reputation to buy BG as oil prices sank, is promising investors higher returns and cash flows at lower oil prices as he resets the company following the $54 billion acquisition.

He has renegotiated contracts, eliminated thousands of jobs, maintained Shell’s asset-sale programme and sought to improve efficiency to weather the oil-market slump.”

If we see oil price levels at a level where we have to go further, we will go further,” Mr Van Beurden said in an interview with Bloomberg TV.

“We still have more in our tank in terms of taking cost out. We have more in our tank in terms of deferring or canceling investment programmes.”

Bloomberg