Shell's fourth-quarter 2015 earnings, on a current cost of supplies (CCS) basis, were $1.8 billion compared with $4.2 billion for the same quarter a year ago, a decline of 56 percent.
The oil giant's exploration and production side recorded fourth-quarter earnings "impacted by the significant decline in oil and gas prices, partly offset by lower costs."
On an annual basis, Shell posted the lowest income in 13 years in 2015, according to Reuters, with income falling 87 percent from the previous year to $1.94 billion.
Shell's chief executive, Ben van Beurden, said the company expected to make further reductions to capital spending in 2016 and staff reductions in both Shell and BG Group, the natural gas company Shell is taking over following shareholder approval last week.
"We are making substantial changes in the company, reorganizing our Upstream (exploration and production), and reducing costs and capital investment, as we refocus Shell, and respond to lower oil prices. As we have previously indicated, this will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies," he said in an earnings statement.
The bad news was not confined to Shell alone. Earlier on Thursday, Norwegian petroleum company Statoil also reported a cut in capital spending as oil prices continue to drag on the major.
In the fourth quarter of 2015, Statoil posted adjusted earnings of 15.2 billion Norwegian crowns ($1.78 billion) but ahead of the 13.9 billion crowns expected by analysts polled by Reuters. Still, adjusted earnings were down from 26.9 billion crowns in the same period the year before, marking a 44 percent decline.
Although income was higher than expected, the group posted a net loss of 9.2 billion crowns in the fourth quarter, worse than the 8.9 billion crowns loss seen in the same period the year earlier. Analysts polled by Reuters had expected net profit of around 3.18 billion crowns .
The company said the loss was mainly as a result of lower short-term oil price assumptions leading to impairment charges and provisions.
The oil company said it planned to make further cuts to capital spending in 2016, from $14.7 billion in 2015 to around $13 billion in 2016.
The earnings come amid tough times for oil majors although shares of both Shell and Statoil were trading higher on Thursday, up 4.9 and 3.7 percent respectively.
After a brief rally in the new year on hopes that major oil producing nations could come to a deal to cut production, oil prices have fallen further. However, prices experienced a rally Wednesday on a lower dollar and renewed hopes of a production cut.
Eldar Sætre, the chief executive of Statoil, told CNBC on Thursday that no part of the energy industry was immune to lower oil prices.
"Obviously, we are highly impacted by the oil price like the rest of the oil and gas industry so you need to stay focused on what you can influence and where you can make an impact and we are doing very good progress on that," he said, noting that operational efficiency had improved.
He said Statoil was still preparing to invest despite the low price of oil. "We are continuously looking at opportunities that might be out there and you might have picked up that we acquired a share in Lundin (Petroleum) a few weeks ago."
Sætre added that the near-term outlook for oil prices was not so gloomy. "I do believe that we are heading towards a rebalancing of the oil market gradully and we're getting into that situation in the next 12 months or so," he said.