ROYAL Dutch Shell is cutting £9.9bn from its spending plans over the next three years as it responds to sliding oil prices.

The Anglo-Dutch oil firm says its move is not an over-reaction, adding lower prices mean it can reduce its own costs.

The move came as Shell unveiled results showing a 12 per cent rise in underlying profits to £2.15bn for the final quarter of 2014.

Ben van Beurden, chief executive, said: "We are taking a prudent approach and we must be careful not to over-react to the fall in oil prices.

"We are taking structured decisions to balance growth and returns."

Last week, the firm abandoned a £4.3bn plan to build one of the world's largest petrochemical plants in Qatar with Qatar Petroleum.

Shell's move comes as the oil and gas sector continues to be rocked by the low price of oil.

Earlier this week, The Northern Echo exclusively revealed 45 workers face redundancy at DeepOcean UK, which has bases in Darlington and Teesside, with bosses blaming the move on oil prices and Government contract snubs.

The company is known for specialist trench digging and underwater power cable laying for oil, gas and renewable energy projects, and employs 136 staff in the North-East.

North Sea operators BP and Talisman-Sinopec are also axing hundreds of posts in response to oil plummeting to less than $50 a barrel.