Shell embarks on a series of operational and financial initiatives and is committed to continuing $10bn assets divestment programme
Royal Dutch Shell has announced plans to reduce costs and spending to support the financial strength and resilience amid the coronavirus pandemic.
The company said it has implemented a series of operational and financial initiatives required for the firm to be “well-positioned for the eventual economic recovery”.
Shell is planning to reduce its capital expenditure for 2020 by $5bn, to $20bn or less from its originally planned spending of more than $25bn.
Additionally, the company is planning to cut $3-4bn over the next 12 months compared to the previous year’s operating costs.
Royal Dutch Shell CEO Ben van Beurden said: “As well as protecting our staff and customers in this difficult time, we are also taking immediate steps to ensure the financial strength and resilience of our business.
“The combination of steeply falling oil demand and rapidly increasing supply may be unique, but Shell has weathered market volatility many times in the past.
“In these very tough conditions, I am very proud of our staff and contractors across the world for maintaining their focus on safe and reliable operations while also ensuring their own health and welfare and that of their families, communities and our customers.”
Shell committed to continuing $10bn assets divestment programme
The company, however, said it is committed to moving ahead with its divestment programme, which aims to sell more than $10bn of assets in 2019-20 although timing depends on market conditions.
Moreover, Shell is planning to withdraw buyback of the next tranche of shares.
In February 2020, Shell has completed the $1.2bn sale of the Martinez Refinery and associated logistics assets to PBF Energy’s subsidiary PBF Holding in California, US.
The acquisition is expected to expand PBF Energy’s total throughput capacity to more than one million barrels per day (bpd).