Oil majors Total and Shell announce their response to falling crude oil prices
- Organic capital expenditures (capex) cuts of more than USD3 billion, ie. more than 20%, reducing 2020 net investments to less than USD15 billion. These savings are mainly in the form of short-cycle flexible capex, which can be arbitrated contractually over a very short time period;
- USD800 million of savings in 2020 on operating costs compared to 2019, instead of the USD300 million previously announced;
- Suspension of the stock buyback program – the company announced a USD2 billion buyback for 2020 in a USD60 per barrel environment; it bought back USD550 million in the first two months.
- reduction of underlying operating costs by USD3-4 billion per annum over the next 12 months compared to 2019 levels;
- reduction of cash capital expenditure to USD20 billion or below for 2020 from a planned level of around USD25 billion;
- and material reductions in working capital.