Saudi Aramco plans to cut its capital spending by $20-$25 billion this year to pay pidends of $75 billion it pledged to investors during its initial public offering last year, the Financial Times said on Wednesday.
Financial Times report says the new level of capital spending is largely dedicated to exploration and production and will not change over the next three years.
Aramco's spending has witnessed wide cuts to maintain liquidity at a time when the oil industry is grappling with the repercussions of lower crude prices, which may become a new normal for a long time after the coronavirus pandemic that hit demand.
The Saudi giant said on Sunday it expected capital spending for 2020 to be at the lower end of the original range of $25 to $30 billion, down from $32.8 billion as the state-owned company reported a 73% drop in second-quarter profit.
It is noteworthy that Saudi Arabia relies on oil sales for 64% of its revenue, admitting it faces a severe crisis after falling from $70 a barrel in January to $20 in April, before recovering to around $ 44 a barrel.
Follow the latest news on Google News
