Italian energy group Eni will cut its capital spending by a quarter this year, and more next, as it moves to mitigate the impact from falling commodity prices because of the coronavirus emergency.
In a statement on Wednesday, the state-controlled energy major said it would cut its planned capex by about 2 billion euros ($2.2 billion) this year and by around 2.5 billion to 3.0 billion euros in 2021.
It also said it would be cutting its operating expenses this year by around 400 million euros.
"We are taking these actions in order to defend our robust balance sheet and the dividend while maintaining the highest standards of safety at work," Chief Executive Claudio Descalzi said.
The world’s biggest oil and gas companies are slashing spending following a collapse in oil prices driven by a slump in demand because of the coronavirus pandemic and a price war between the top exporters, Saudi Arabia and Russia.
Eni said last week it was canceling a share buyback and sharply cutting investments, but gave no details. On Tuesday, it said it was reviewing its projects in the Middle East.
It said on Wednesday the cuts would mainly hit its core business of looking for oil and gas, but added operations could be quickly resumed once conditions were more favorable.
It said it now expected 2020 output of between 1.8 million and 1.84 million barrels of oil equivalent per day and the same the year after.
($1 = 0.9222 euros) ($1 = 0.9195 euros)
(Reporting by Agnieszka Flak and Stephen Jewkes; Editing by Peter Cooney)