|Shell Oil Company (Photo credit: Wikipedia)|
Falling oil prices are forcing Royal Dutch Shell to cut investment by $15bn (£9.9bn) over the next three years.
Shell also said profits for the last three months of 2014 had risen to $4.2bn compared with $2.2bn in the same period a year earlier.
Full year earnings also rose to $19bn in 2014, up from $16.7bn in the previous year.
The company said it had sold some $15bn in assets over the last year before the markets had weakened.
Shell 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."
Separately, Shell chief financial officer Simon Henry told BBC business editor Kamal Ahmed that the company "will" drill in the Arctic this year after endless delays and legal battles.
Shell still needs to get the right permits but the move is likely to see a sharp reaction from environmental groups.
Estimates suggest that there could be as much as 24bn barrels of oil equivalent in Alaska - enough to supply US consumption for more than three years.
Analysis: Kamal Ahmed, BBC business editor
As the first of the major oil companies to report its figures for last year, Shell plays the role of the canary in the coal mine - or on the oil rig.
After a rather sickly 2013, profits are actually up.
But the impact of the low oil price is clearly biting. The company announced that it would be cutting investment over the next three years in new exploration and the development of oil and gas fields, a move that will raise fresh concerns about its business in the North Sea.
Last summer Shell announced the loss of 250 jobs in Aberdeen.
The chief executive, Ben Van Beurden, said that the company would not "over-react" to the oil price which has fallen by 60% since last June.
And of course a low oil price means lower prices at the petrol pumps for consumers.
He said though that Shell would look at further cuts if necessary.
As well as the North Sea, the company's operations in Nigeria, where it recently paid a £55m bill to clean up pollution after a major oil spill, and the Arctic will also come under increased scrutiny.
Profits for the quarter after stripping out one-off items, such as asset sales and accounting changes, were $3.26bn. That is a 12% rise on the same period a year earlier but down from the $5.85bn in the June to September quarter.
Shares in Shell fell more than 3% in morning trade, and shares in other oil companies were also lower.
Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said: "As expected, fourth quarter performance has been impacted by the lower oil price, although downstream refining operations have provided some counterbalance.
"More broadly, the numbers are below forecast, with the news providing a difficult start to the oil majors' results season.
"In all, and despite the disappointing numbers, the dividend payment remains core, with the payment being left unchanged."
Shell said it was spending $12bn on dividends to shareholders in 2014, and also repurchased $3.3bn of its own shares.