In response to volatility in the oil market and the ongoing impact of Covid-19, Royal Dutch Shell has announced that it will reduce its planned capital expenditure by 24% from earlier levels of approximately $26.5bn. The company is also planning to reduce its operating expenses by $3-$4bn over the next 12 months compared to 2019 levels.
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These measures are anticipated to enhance Shell’s free cash flow by up to $8-$9bn on a pre-tax basis for 2020. Additionally, Shell has suspended its $25bn share buyback programme to cope with the oil price downturn and secured a $12bn credit facility to safeguard its dividend distribution plan.
