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Shell is set to cut investment by $15bn in the next three years due to the sharp decline of oil prices.

Oil prices have declined nearly 60% in recent months from nearly $115 a barrel in June 2014.

Shell announced it is considering further reductions to capital spending, should the market outlook warrant that step, but is planning to retain growth potential for the medium-term.

The company’s 2015 organic capital investment is expected to be lower than 2014 levels.

The company’s profits for the fourth quarter of 2014 increased to $4.2bn, compared with $2.2bn in the same period in 2013.

Full-year earnings increased to $19bn in 2014, up from $16.7bn in the previous year.

Shell CEO Ben van Beurden said: "Our strategy is delivering, but we’re not complacent. Weaker oil prices underline that there’s a lot more to do. The three themes of financial performance, capital efficiency and project delivery, will remain as Shell’s priorities in 2015.

"We are taking a prudent approach here and we must be careful not to overreact to the recent fall in oil prices. Shell is taking structured decisions to balance growth and returns."

The company said it will continue to invest in a competitive suite of new oil and gas fields and liquefied natural gas (LNG), with the next wave of significant start-ups in the 2016-18 timeframe.

Image: Shell chief executive officer Ben van Beurden. Photo: courtesy of Shell.