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April 16, 2020updated 17 Apr 2020 9:10am

Coronavirus company impact: Royal Dutch Shell

By GlobalData Energy

Shell announced that it would 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. Moreover, the company has secured a $12bn credit facility to safeguard its dividend distribution plan.

Shell revises CapEx and OpEx to enhance free cash flow

After reducing CapEx guidance for 2020, Shell announced its exit from Lake Charles liquefied natural gas (LNG) project in Louisiana. The company is also postponing FIDs on several upcoming oil and gas fields. This includes the Browse project and Crux expansion project in Australia, the Cambo deepwater oil project in the North Sea and the Bonga Southwest / Aparo in Nigeria.

The Covid-19 outbreak in the UK North Sea region has prompted Shell to postpone the construction of the Shearwater-Fulmar gas pipeline. This development will delay the company’s objective of increasing gas production from the Shearwater platform.

The company also decided to halt the construction at Shell Chemical’s planned Beaver County Complex, one of the largest upcoming petrochemical projects of the company in the US, due to Covid-19.

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COVID-19 has already affected our lives forever. The way we work, shop, eat, seek medical advice, and socialize will all be different in the future. Quite how different remains to be seen, but all industries must plan for multiple eventualities. Are you interested in actionable insights on the business challenges induced by the pandemic? GlobalData's cross-sector report analyzes the significance of this major disruptive theme across industry verticals. It provides side-by-side research of alternative datasets to present you with unique quantitative analysis of the effects of COVID-19 and how these differ across sectors. Additionally, it offers qualitative analysis of each sector and analyzes COVID-19’s impact on leading companies. Whatever your company’s imminent strategic plans, the long-lasting impact of COVID-19 must not be overlooked. Find out how to futureproof your business operations – download our report today.
by GlobalData
Enter your details here to receive your free Report.

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