(Bloomberg) — The world’s biggest oil companies, set to report their worst quarterly earnings in more than a decade, are finding their cost-cutting efforts haven’t matched the decline in crude prices over the past two years.

While producers have been deferring projects, eliminating jobs and freezing salaries, the process will take three years to complete, according to Barclays Plc’s Lydia Rainforth. In the meantime, profits are being hammered.

“A lot of work still needs to be done on costs,” Rainforth, a London-based oil sector analyst, said by phone. “It’s a reflection of how much costs had piled up and how long a process this is.”

For producers from Royal Dutch Shell Plc to Chevron Corp., reeling under the threat of credit-rating downgrades, slashing costs is the surest way of protecting balance sheets. Still, reversing course is proving painful after $100 oil persuaded companies to pump money into expensive areas in search of new deposits, hire more people and rent rigs and services at record rates. Productivity suffered.

Shell, Europe’s biggest oil company, had operating costs of $14.70 a barrel last year when Brent crude averaged $53.60, Barclays said in a report last month. That’s more than double the $6-a-barrel cost in 2005, the last time oil averaged in the $50s, according to the report. BP Plc’s operating expense was $10.40 last year compared with $3.60 in 2005, according to Barclays. The operating costs don’t include capital spending, taxes and royalties paid by producers.

Earnings Outlook

After rising every year from 2010 to 2014, Shell’s costs fell 15% last year, according to Barclays. BP’s dropped 19%.

That’s not been enough to counter the rout in oil prices.

BP is expected to post an adjusted loss for the first time since the Gulf of Mexico oil spill in 2010, when it reports first-quarter results on April 26, according to analyst estimates compiled by Bloomberg. Shell, reporting on May 4, is likely to post its weakest adjusted profit in more than a decade.

Exxon Mobil Corp., the world’s biggest oil company, will report the lowest quarterly profit in more than two decades on April 29, according to analysts estimates. Chevron is estimated to report a second consecutive loss the same day. Total SA’s first-quarter adjusted net income is predicted to be the lowest since 2001.

The extent of the work facing oil-major CEOs can be seen at BP. While the British producer’s boss Bob Dudley was one of the first to prepare for the downturn, it still took BP most of 2014 and 2015 to identify where costs could be cut, with full implementation only coming this year, Rainforth said.

The London-based company said in February it had reduced annual cash costs by $3.4 billion compared with 2014 and expected them to be about $7 billion lower in 2017. A BP spokesman declined to comment further.

Shell plans to reduce operating expenditure by $3 billion in 2016 after cutting it by $4 billion last year. The company declined to comment beyond reiterating that it has options to further reduce spending should conditions warrant it. Exxon and Chevron declined to comment.

Total is targeting spending on operating its exploration and production business of $6.50 a barrel of oil equivalent this year, after cutting that to $7.40 last year from $9.90 in 2014, according to a company presentation in February.

Total Dividend

Total Chief Executive Officer Patrick Pouyanne told reporters in Paris Thursday that action taken to reduce costs would allow the company to fully fund its dividend from cash flow at an oil price of $60 a barrel.

Companies are doing whatever it takes. Total is reducing the speed of its service boats in Angola to save gasoline, renegotiating maintenance contracts in Congo, using fewer transportation vessels in Brunei and has stopped using a storage tank in Indonesia to save the French company about $5 million, Chief Financial Officer Patrick de la Chevardiere told analysts in July last year.

“The companies need to do more of the same over an extended period,” said Iain Armstrong, a London-based analyst at Brewin Dolphin Ltd., which owns Shell and BP shares. “Companies are sharing helicopters and tug boats in the North Sea. It shows how far down the track they had gone in over-spending and over-engineering projects.”

Brent crude averaged $35.21 a barrel in the first quarter, the lowest in almost 12 years. It traded at $45.16 on the ICE Futures Europe exchange in London at 2:20 p.m. Friday in New York.

The impact of weaker prices is being compounded by lower profits from refining, a business that has been bailing out oil majors over the past couple of years. Global refining margins dropped to $10.50 a barrel in the first quarter, 31% lower than a year earlier and 20% lower than the preceding quarter, according to BP’s data.

Oil prices rose for 10 of the 11 years until 2012 and averaged above $80 a barrel every year from 2010 to 2014. In those years, the companies were flush with cash and they expanded, even as productivity languished. Shell, BP and Total’s oil and natural gas output per employee in its upstream division dropped in many of those years as costs blew up, according to a Morgan Stanley report this month.

“Oil companies haven’t usually been good at controlling costs and allowed them to bloat out in the years of high oil prices,” said Philipp Chladek, a London-based analyst with Bloomberg Intelligence. “It feels like many oil companies haven’t really bought in to the lower for longer, at least by actions. Most people still seem to believe that oil will rebound to $60 or above before long.”