Total announced a revised CapEx of $14.7bn for 2020 by factoring average crude oil prices of $30/barrel. This includes a $2.5bn cut in upstream CapEx and another $500m in the downstream sector.

The company will now operate a mix of short-cycle projects while also retaining some of its long-term targets, especially in low-carbon energy and digital transformation. The company has also suspended its share buyback programme worth $2bn. Additionally, Total has increased its targeted operational savings in 2020 to $800m from $300m.

Total revises CapEx guidance in the wake of a drop in oil prices

Total’s refining and petrochemical operations have sizeable exposure to Covid-19 affected countries and may experience a fall in capacity utilisation over the near term.  Approximately 40% of the Total’s refining capacity is concentrated in France, the US, Germany and South Korea.

In addition, over 70% of the company’s petrochemical plant capacity is based in South Korea, the US and France. The company has postponed the restart of Grandpuits refinery in France, which was shut down for scheduled maintenance and the lack of demand.

The company has also reduced the production at Leuna refinery, Germany, by 25% due to low demand. Total has a high share of liquefied natural gas (LNG) regasification in the UK and the US. In contrast, the company’s upstream and LNG liquefaction operations appear to be less vulnerable to the Covid-19 pandemic.