Oil major Shell lowered capital expenditure for 2020 by about $5 billion on Monday and suspended the next tranche of its share buyback plan, as the company tries to weather a hit from the recent oil price crash.
The company said it would reduce 2020 cash capital expenditure to $20 billion or below from a planned level of around $25 billion, adding that the initiatives would contribute $8 billion-$9 billion to free cash flow on a pre-tax basis.
Shell also said underlying operating costs will be cut by $3 billion to $4 billion per annum over the next 12 months compared to 2019 levels.
"We will continue to review the dynamically evolving business environment and are prepared to take further strategic decisions and consider changes to the overall financial framework as necessary," the company said.
The company joins U.S. oil major Chevron, which has also said it as looking at ways to cut spending after oil prices plunged nearly a third in value in a single day after a price war erupted between top producers Russia and Saudi Arabia.
(Reporting by Muvija M in Bengaluru; Editing by Shounak Dasgupta)