The main elements of the action plan are:
- Reducing organic capex for 2020 from
USD 10-11 billion to aroundUSD 8.5 billion , a reduction of around 20%. - Reducing exploration activity for 2020 from around
USD 1.4 billion to aroundUSD 1 billion (2). - Reducing operating (3) costs for 2020 by around
USD 700 million compared to original estimates.
Reductions in organic capex are driven by a strict process of prioritisation where flexibility of cost and schedule for sanctioned and non-sanctioned projects have been reviewed. Within US onshore activities, drilling and completion activities are being halted to produce the volumes at a later period, reducing investments significantly for 2020.
These cost reductions come in addition to the already announced suspension of buy-back under the share buy-back programme until further notice. The second tranche of around
"
"We have implemented measures to reduce the risk of spreading the corona virus and have so far been able to maintain production at all our fields. Safe operations remain our first priority in this situation," says Sætre.
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(1) Excludes inorganic investments and potential redetermination. Based on taxes payable.
(2) Assuming 75% exploration expensed and 25% capitalised.
(3) Operating cost (excluding variable cost such as transportation and processing), sales and general administration and field development costs. Expensed exploration costs are not included.
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Source:
2020 GlobeNewswire, Inc., source