Total and other Oil Majors Slash Spending

Global oil, gas producers cut spending after crude price crash.

(Reuters) – Oil and gas companies are cutting spending plans in response to the new coronavirus and a push by Saudi Arabia and Russia to ramp up output.

International benchmark prices have more than halved since the start of the year, falling to around $25 a barrel.

North American oil and gas producers have cut capital spending by about 30% on average, data compiled by Reuters showed.

Below are plans announced by major energy companies:

TOTAL

Total said that with prices of $30 per barrel, it would now target organic capital expenditure cuts of more than $3 billion, mainly in exploration. The company will also target $800 million in 2020 operating cost savings compared to 2019, instead of the $300 million previously announced, and suspend its outstanding $1.5 billion share buyback programme.

ENI

Eni followed rivals by cancelling a share buyback and sharply cutting investments. It said it would withdraw plans it had to buy back 400 million euros ($433.84 million) of shares this year, adding it would reconsider a buyback when Brent was at least $60 per barrel.

SAUDI ARAMCO

Saudi Arabia’s state-run oil company Saudi Aramco said it planned to cut capital spending for 2020 to between $25 billion and $30 billion, compared with $32.8 billion in 2019.

ROYAL DUTCH SHELL

Shell lowered capital expenditure for 2020 by about $5 billion and suspended the next tranche of its share buyback plan, as the company tries to weather a hit from the recent oil price crash.

ENERGEAN

Mediterranean gas group Energean said it would cut its investments by $155 million in Greece and Israel and could reduce its budget for Egypt by another $140 million if needed without endangering delivery of its long-term offtake deals.

DNO

Norway’s DNO which operates in Iraq’s Kurdistan region, said it would cut its 2020 budget by 30% or $300 million and lower its dividend for the first half of the year.