COVID-19: Oil Companies Cut Expenditure by 18%

• COVID-19: Oil Companies Cut Expenditure by 18%

Top global oil firms are adjusting their 2020 financial plans to accommodate the ongoing global economic route as coronavirus pandemic erodes last year’s profit and threaten to ground operations of some of the world’s most powerful energy firms.

The five major oil companies, including Saudi Aramco and Royal Dutch Shell, have cut 2020 spending by a combined $19 billion or 18 percent from their initial budget in recent weeks to $106 billion to curb the impact of lower oil prices and fall in global demand on operations as nations struggle with COVID-19.

This, Wood Mackenzie, a global energy firm, attributed to the ongoing disagreement between two oil giants, Saudi Arabia and Russia, who failed to agree on production cuts earlier this month despite the global situation.

“If prices do not rebound quickly, we’ll see a significant impact on currently producing fields and future supply,” it said.

On Wednesday, Equinor of Norway said it would cut capital expenditure by $2 billion this year while Chevron announced on Tuesday it would adjust spending by as much as $4 billion in 2020.

Other oil companies are also cutting expenses as the US oil giant Exxon Mobil Corporation and Britain’s BP announced the would cut expenses but refused to give details.