• 4 minutes Trump will meet with executives in the energy industry to discuss the impact of COVID-19
  • 8 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 11 minutes Why Trump Is Right to Re-Open the Economy
  • 13 minutes Its going to be an oil bloodbath
  • 1 min "Saudi Armada heading to U.S.", "Dumping" is a WTO VIOLATION.
  • 2 hours Cpt Lauren Dowsett
  • 48 mins Trump will be holding back funds that were going to W.H.O. Good move
  • 5 hours Death Match: Climate Change vs. Coronavirus
  • 26 mins Washington doctor removed from his post, over covid
  • 56 mins Which producers will shut in first?
  • 3 hours Free market or Freeloading off the work of others?
  • 4 hours ‘If it saves a life’: Power cut to 1.5 million Californians
  • 6 hours US Shale Resilience: Oil Industry Experts Say Shale Will Rise Again
  • 8 hours Ten days ago Trump sent New York Hydroxychloroquine. Being administered to infected. Covid deaths dropped last few days. Fewer on ventilators. Hydroxychloroquine "Cause and Effect" ?
  • 8 hours Russia's Rosneft Oil is screwed if they have to shut down production as a result of glut.
  • 6 hours How to Create a Pandemic
Alt Text

The Largest Oil Market Intervention In History?

While the figures quoted in…

Alt Text

OPEC’s Plan To Take Over The Global Oil Industry

Much of the commentary surrounding…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Oil Majors Slash Spending Amid Price Plunge

Shell became the latest oil major to announce significant spending cuts to protect its balance sheet from crashing oil prices, joining other majors such as Exxon in the drive to optimize costs at oil below $30 a barrel.  

On Monday, Shell said it was reducing its underlying operating costs by US$3-4 billion per year over the next 12 months compared to 2019 levels. The supermajor will also cut capital expenditure to US$20 billion or below this year, down from originally planned level of around US$25 billion, and will slash working capital. 

“As well as protecting our staff and customers in this difficult time, we are also taking immediate steps to ensure the financial strength and resilience of our business,” Ben van Beurden, Chief Executive Officer of Shell, said in a statement. “The combination of steeply falling oil demand and rapidly increasing supply may be unique, but Shell has weathered market volatility many times in the past,” the executive added.

Shell’s board has also decided not to continue with the next tranche of the share buyback program after the current share buyback tranche is completed.

Another major operator in Europe and the North Sea, Aker BP, also said on Monday it would slash capital expenditure and put on hold development at fields that have not been sanctioned yet. Aker BP is slashing exploration spending by 20 percent in 2020, with further significant reductions planned for 2021-22. Aker BP expects its 2020 capex to be reduced by 20 percent to around US$1.2 billion, while capex in 2021-22 is expected to drop well below US$ 1 billion.   

U.S. oil producers were the first companies to react to the crashing oil prices, announcing capital spending and dividend cuts by the hour as many of their operations are unsustainable and deep in the red at $30 a barrel WTI Crude.

Oil supermajors aren’t immune to the price crash, as recent announcement show. ExxonMobil said last week it was looking to “significantly reduce spending as a result of market conditions caused by the COVID-19 pandemic and commodity price decreases.”

The U.S. supermajor has already started to notify contractors and vendors that it would be reducing expenditure in the near term, spokesman Jeremy Eikenberry said on Sunday, as carried by Reuters.  

France’s Total also announced on Monday organic capex cuts of more than US$3 billion, equal to more than 20 percent,  with 2020 net investments now cut to less than US$15 billion.  Total also suspends its buyback program, after it had announced a US$2 billion buyback for 2020 in a $60 a barrel environment.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage






Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News