Equinor reducing exploration activity amid COVID-19

Oil&Gas Materials 25 March 2020 12:52 (UTC +04:00)
Equinor reducing exploration activity amid COVID-19

BAKU, Azerbaijan, March 25

By Leman Zeynalova – Trend:

Norway’s Equinor company has presented around $3 billion action plan to strengthen the financial resilience in a market impacted by the COVID-19 and low commodity prices, Trend reports with reference to the company.

The main elements of the action plan are:

Reducing organic capex for 2020 from $10-11 billion to around $8.5 billion, a reduction of around 20 percent;

Reducing exploration activity for 2020 from around USD 1.4 billion to around $1 billion;

Reducing operating costs for 2020 by around $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 USD 675 million, including the Norwegian State share, intended to be launched from around 18 May to 28 October 2020, will not be executed as previously planned.

“With the measures now being implemented, Equinor can be organic cash flow neutral before capital distribution in 2020 with an average oil price around $25 per barrel for the remaining part of the year,” said the company.


Follow the author on Twitter: @Lyaman_Zeyn