LONDON (Reuters) – Royal Dutch Shell (RDSa.L) will lower spending by $5 billion and suspended its vast $25 billion share buyback plan in an effort to weather the recent collapse in oil prices, it said on Monday.
FILE PHOTO – A sign is seen at a Shell facility near the Houston Ship Channel in Galena Park, Texas, U.S., May 5, 2019. REUTERS/Loren Elliott
The Anlgo-Dutch oil major said it would reduce capital expenditure to $20 billion or below from a planned level of about $25 billion while seeking to reduce operating costs by an additional $3 billion to $4 billion over the next 12 months.
The cuts are expected to boost Shell’s cash generation by between $8 billion and $9 billion on a pre-tax basis.
Shell’s shares were down 3.5% in early London trading, against a 3% for the broader European energy sector .SXEP
Oil prices have crashed by more than 60% since January, hit by global demand destruction because of the coronavirus pandemic and a price war between top producers Saudi…
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