Chevron, Eni, OMV reduce spending plans

March 26, 2020
Three more oil companies have responded to the current market price volatility.

Offshore staff

SAN RAMON/SAN DONATO MILANESE/VIENNA – Three more oil companies have responded to the current market price volatility.

Chevron is reducing its guidance for 2020 organic capital and exploratory spending by 20% to $16 billion.  Reductions are expected to occur across the portfolio and are estimated to include $700 million in upstream projects and exploration and $500 million in upstream base business spread broadly across its US and international assets.

Cash capital and exploratory expenditures are expected to decrease by $3.3 billion to $10.5 billion in 2020. Total capital and exploratory spending in the second half of 2020 is expected to be about $7 billion, an annual run rate 30% lower than the approved budget announced in December 2019.

In addition to reducing capex, the company expects to close the sale of its upstream interests in Azerbaijan and its interest in a related pipeline in April. Also, the company continues to execute its plans to reduce run-rate operating costs by more than $1 billion by year-end 2020.

Eni said it will reduce capex in 2020 by around 2 billion euros ($2.2 billion), equal to 25% of the total capex planned, and opex by about 400 million euros ($442 million). In 2021, the company expects a capex reduction of around 2.5-3 billion euros ($2.8-$3.3 billion), equal to 30-35% of the capex scheduled for the same year in the business plan.

The projects involved are related mainly to upstream activities, particularly production optimization and new projects developments scheduled to start in the short term.

OMV is reducing about 500 million euros ($552 million) in organic investments to less than 2 billion euros in 2020. This is a reduction of more than 20% compared with the originally planned investments of EUR 2.4 billion ($2.6 billion) for 2020. The company is also cutting costs by around 200 million euros ($221 million) compared to 2019 (opex and exploration expenditures).