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Shell reduces CAPEX and operating costs

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Oilfield Technology,

In response to the Covid-19 pandemic, Shell has announced a series of operational and financial initiatives designed to reduce underlying operating costs by US$3 – US$4 billion per annum over the next 12 months compared to 2019 levels, reduce CAPEX to US$20 billion or below for 2020 from a planned level of around US$25 billion, and achieve material reductions in working capital.

The initiatives are expected to contribute US$8 – US$9 billion of free cash flow on a pre-tax basis. Shell has said it is still committed to its divestment programme of more than US$10 billion of assets in 2019 – 2020 but timing depends on market conditions.

The company will publish its next quarterly update note on 31 March 2020 and release its 1Q20 results on 30 April 2020.

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