In a context of oil prices near $30/bbl, Patrick Pouyanné, chairman and chief executive officer of Total, said the company will cut its 2020 organic capex budget by more than $3 billion, or 20%, reducing 2020 net investments to less than $15 billion. The savings are mainly in the form of shortcycle
flexible capex, which can be arbitrated contractually over a very short time period, he said.
The company anticipates $800 million of savings in 2020 on operating costs compared to 2019, instead of the $300 million previously announced. It also will suspend its $2-billion buyback program. In the first two months of the year the company bought back $550 million.
In February, the company noted plans to continue disciplined spending and the continuation of its cost reduction program with an objective of more than $5 billion in cumulative savings this year. Net investments in 2020 were projected to be $18 billion, and the group was expected to complete its $5 billion asset sale program over the years 2019-20 ($3 billion already announced).
Organic production growth for 2020 was previously expected to be more than 2% in 2020, due to ramp-ups of projects started in 2019 and expected start-ups in 2020, notably Iara 2 in Brazil.
