ROYAL Dutch Shell has highlighted the potential it sees to slash costs following the planned $70 (£45bn) billion takeover of BG in comments that stoked concern about the likely impact on jobs in the North Sea.

The deal will increase the size of Shell’s business in the North Sea where the oil and gas giant may then make significant cuts as directors try to achieve the returns they are targeting.

In an update on strategy, Shell said it has increased its estimate of the synergies it will be able to squeeze out of the enlarged business by $1bn since the deal was announced in April, to $3.5bn.

Led by chief executive Ben van Beurden, the company said a big share of the savings will come from removing areas of duplication in administration and support departments and by consolidating offices.

The update fuelled fears about the implications for the North Sea, where Shell and BG have around 2,800 staff and contractors working in total. Both have big operations centres in Aberdeen.

Shell had made clear it was likely to sell mature assets in the Central North Sea off Scotland even before agreeing the deal with BG, which owns a number of fields in the area.

Shell confirmed yesterday the integration process is expected to result in job losses at the enlarged firm but declined to say how many or where the axe will fall.

The company has shed 7,500 posts globally this year in response to the crude price plunge. It has cut 500 North Sea jobs since August last year.

After the update the trade union Unite renewed calls for Shell to provide assurances about the outlook for jobs following the BG deal, noting the scale of the challenge facing the North Sea industry amid the crude price plunge.

Oil and gas firms have shed around 5,500 North Sea jobs in response to the crude price fall.

A spokesperson for Unite said: “We previously expressed our concerns about the prospect of a massive cost-cutting agenda in April and we reiterate our view that the short-term sacrifice of essential jobs and skills, which are crucial to the industry’s longer-term recovery and sustainability, should be avoided.”

Mr van Beurden told reporters: "Although oil prices have fallen in 2015 the valuation case for the BG acquisition still looks compelling today for both sets of shareholders."

The company plans to sell $50 billion worth of assets between 2014 and 2018 to help cover the cost of the acquisition and focus its portfolio on large projects.

Shell expects the cost cuts and disposals will allow it to make the deal work with an oil price in the mid-$60s a barrel. Brent crude traded at $49/bbl yesterday compared with $115/bbl in June last year.

Announcing a third quarter loss of $8bn last week following hefty write offs in the Arctic and Canada, Shell underlined its enthusiasm for the big new projects the company is developing West of Shetland with BP and the gas assets it owns off England.

However, finance chief Simon Henry said the company will be looking hard at its portfolio in the Central North Sea off Scotland where many assets have been onstream for years.