Royal Dutch Shell reduced its 2016 spending plans on May 4 by another 10 percent from the target set in February when it completed the acquisition of BG Group, and said it could cut further if needed.

In its first results since the deal that transformed it into the world’s top LNG producer, Shell trimmed spending to $30 billion by canceling projects such as the sour gas project in Abu Dhabi, and by slashing exploration costs.

Europe's largest oil company has been under pressure from shareholders to cut annual spending below $30 billion to ensure it can maintain its dividend given the slow recovery in the oil prices.

“Can we go further? Yes, we can,” Shell Chief Financial Officer Simon Henry, told reporters on May 4.

Having grappled with low oil prices for almost two years, capital spending, or capex, in the industry is set to fall for a second consecutive year, something that has not happened for more than three decades.

Last week, European rivals BP and Total lowered their projected 2016 capital spending programs.

Analysts welcomed Shell's spending cuts, though some investors are still hoping for deeper cuts when it announces its strategic outlook at a June 7 investor day.

Shell's shares were down 2.0 percent at 1131 GMT.

“With continued reduction of costs inside both companies in 2016 and market balancing now firmly on the horizon, the combined entity will be one of the key winners on the other side,” said Berstein analysts, who rate Shell “outperform.”

Cost Cuts

In a bid to slim down and raise cash, Shell is pressing ahead with a $30 billion asset disposal program by the end of 2018, targeting first and foremost its downstream division.

It expects to make at least $3 billion from mainly downstream disposals this year, Henry said, meaning Shell needs to step up asset sales in the coming years to meet its target.

Shell also said its annual operating expenses will fall to $40 billion this year, despite the BG acquisition, from $53 billion in 2014.

“Essentially Shell has integrated BG with no increase to its prior cost structure,” said analysts at Jefferies, who advise to buy Shell shares.

Shell, however, warned that low oil and gas prices, significant maintenance at production sites as well as “substantial redundancy and restructuring charges” will impact second-quarter earnings.

The oil producer plans to cut 10,300 jobs over the coming years and has started redundancy discussions with staff in Britain, Australia and the Netherlands.

Shell’s first earnings update with contributions from BG showed overall oil and gas output rose 16 percent in the first quarter from a year earlier. The addition of BG helped boost the amount of LNG sold by 25 percent to 12.29 million tonnes.

Shell said its definition of net income—current cost of supplies earnings excluding identified items—totaled $1.55 billion in the first quarter, topping the $1.04 billion expected by analysts.

A solid performance from its downstream division was the main reason for higher than expected earnings. It maintained its dividend unchanged at 47 cents per share.