THE chief executive of Royal Dutch Shell, Ben van Beurden, has signalled the planned takeover of BG will be followed by a big sell off of North Sea assets as the company prepares to live with a long period of low oil prices.

Mr van Beurden said the oil and gas giant plans to shrink the enlarged North Sea business to be created by the deal to focus on a core of select assets in an area where he complained taxes and operating costs remained too high.

Shell underlined its enthusiasm for the two giant fields it is developing West of Shetland with BP, which should produce lots of cash when they come onstream.

However, Mr van Beurden made it clear other assets in the North Sea portfolio will struggle to attract investment as Shell slashes spending in response to the plunge in the oil price.

In March the company announced plans to cut 250 jobs in Aberdeen and the UK North Sea. The cuts form part of a programme Shell said yesterday would result in the group shedding 6,500 posts in total this year.

The 6,500 target does not assume further job losses in the North Sea.

But, describing the North Sea as a high cost area, Shell’s chief financial officer Simon Henry said more cuts could not be ruled out.

He said Shell could transfer back office work to low cost locations to help cut costs.

The planned takeover of BG, for around £50bn in cash and shares, will create opportunities to achieve synergies by removing duplicated central functions.

BG has headquarters in Berkshire and runs its North Sea business from Aberdeen.

Asked where the North Sea would fit in the enlarged business, Mr van Beurden told reporters:

“Together we will have a much enlarged position which, to be perfectly frank, we can take a look at and we can high grade from.

“Like any other province that gets mature, and certainly one of course where we have high cost structures and still a very high tax regime, we will have to look at how to restructure this to bring it back to its most advantaged core.”

Mr van Beurden said the takeover of BG would encourage the company to speed up the portfolio rationalisation process. The company plans to focus investment in areas such as large deep water and liquefied natural gas projects. It expects to sell $30bn (£19bn) assets over the next three years to help raise funds that could be used to cut debt and fund payouts to shareholders.

Shell’s announcement came as Centrica, which owns Scottish Gas, said it would shrink its exploration and production division by a third. The energy giant plans to cut 6,000 jobs across the group this year.

Centrica said the slimmed down E&P business would focus on the North Sea and East Irish Sea. The company said it has important assets in the UK that it needs to maximise returns from but investment in new projects will be targeted on Norway. The Canadian business has been deemed non core.

Shell’s latest results provided further evidence of the toll the crude price fall has taken on the sector.

Profit fell 37 per cent to $3.8bn excluding one offs in the three months to June, from $6.1bn in the same period last year.

“Today’s oil price downturn could last for several years,” said Shell. It added: “The company has to be resilient in today’s oil price environment, even though we see the potential for a return to a $70-$90 oil price band in the medium term.”

Brent crude fetched around $54 per barrel yesterday, compared with $115 in June last year.

Asked about the success of the Scottish National Party in the recent general election and the possibility of another referendum on independence, Mr van Beurden said he would not comment on Scottish politics.

Shell announced a second quarter dividend of 47 cents per share, in line with the same period last year.