Norway's Equinor presented an updated outlook for 2020 and an action plan of approximately $3 billion to strengthen financial resilience in a market impacted by the COVID-19 and low commodity prices, it announced on Wednesday.
The company said the company can be organic cash flow neutral in 2020 before capital distribution based on an average oil price of around $25 per barrel for the remaining part of the year.
Equinor detailed the main elements of the action plan as follows:-
1- Reducing organic capex for 2020 from $10-11 billion to around $8.5 billion, a reduction of around 20%.
2- Reducing exploration activity for 2020 from around $1.4 billion to around $1 billion.
3- Reducing operating costs for 2020 by around $700 million compared to original estimates.
President and CEO of Equinor Eldar Saetre said, "Equinor is in a strong financial position to handle market volatility and uncertainty. Our strategy remains firm, and we are now taking actions to further strengthen our resilience in this situation with the spread of the coronavirus and low commodity prices."
He said that Equinor implemented measures to reduce the risk of coronavirus spread and has so far been able to maintain production in all fields.
"Equinor has over the past years realized significant improvements and is today a stronger and more robust company.
"In 2014 Equinor needed an average oil price of around $100 per barrel to be organic cash flow neutral before capital distribution. 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," he said.
By Murat Temizer