BP on Wednesday cut its 2020 spending plans by 25 percent. In the face of the collapse in oil prices triggered by the coronavirus outbreak, the company will reduce output from its US shale oil and gas business.
Following the downfall in oil prices, BP and other big oil and gas companies are having to control spending sharply. BP’s rivals have announced cuts of around 20 percent on average in annual spending.
This year, the company plans to spend $12 billion. Its 2020 spending would be at the lower end of a $15 to $17 billion range, BP had previously said. A $1 billion reduction will be included in investment in its shale business.
The company’s overall oil and gas production is also expected to collapse. Capital spending will be also reduced by BP on its refining and marketing business by $1 billion. Through the digitalisation and integration of its businesses, BP also plans to introduce $2.5 billion of cost savings by the end of 2021.
