British energy giant Shell plans to cut hundreds of jobs from its oil and gas exploration division as part of a cost-cutting program announced last year, a person familiar with the matter said Friday.

The cuts will affect two units specialising in exploration and development of hydrocarbon extraction projects, with their workforces set to be reduced by 20 per cent, the source told AFP.

Offices in the United States and the Netherlands will be most affected, the person added, but the details of the plan are subject to talks with unions.

Shell announced in June 2023 that it intended to implement “structural operating cost reductions of $2 billion to $3 billion by the end of 2025”.

Achieving those reductions will require “new efficiencies and a leaner overall organisation,” a Shell spokesperson told AFP, without confirming the job cuts.

Shell earlier this month said net profit dropped eight per cent in the first half due to weaker gas prices and write-offs.

Despite the fall in margins, the result was helped by lower operating costs and higher hydrocarbon production volumes.

Shell, like its compatriot BP, has backtracked on some climate targets in recent months to the dismay of environmental campaigners, putting more emphasis on oil and gas to boost its profits.