Royal Dutch Shell has confirmed a $15bn (£9.9bn) reduction in its spending plans over the next three years as oil prices hit six-year lows.
The company made the announcement as it unveiled its latest financial results, with Shell's underlying annual profit measure rising 14% to $22.6bn in 2014.
Its profits for the final three months of 2014 increased by 12% to $3.3bn (£2.2bn) but earnings per share, anxiously awaited by investors, missed estimates and Shell confirmed its dividend would be flat.
Its shares fell 4% in early trading on the FTSE 100.
The Anglo-Dutch firm said its annual performance was boosted by a restructuring of its downstream operation, as well as increased output of higher-margin products though upstream exploration and production division profits fell 30% in the final quarter.
Chief executive Ben van Beurden said: "We are taking a prudent approach here and we must be careful not to over-react to the recent fall in oil prices.
"Shell is taking structured decisions to balance growth and returns.
"By successfully delivering against our three key priorities of better financial performance, enhanced capital efficiency and continued strong project delivery, we are improving Shell's competitive position in the oil & gas industry."
Shell is the first oil major to report annual results since the price crash, which began last summer.
The price of Brent crude dropped about 50% during 2014 with that decline continuing in January to $48-per-barrel - 60% down on the costs seen last June.
The plunge in world oil prices has been attributed to a glut in supply caused by a spurt in US shale oil production.
Other major oil-producing nations, especially Saudi Arabia, have been reluctant to lose market share by cutting back production in response to prop up prices.
Global economic weakness, which has damaged demand, is another factor behind the price fall.
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