Italian energy firm ENI will slash its 2020 capex (capital expenditure) by approximately $2.2 billion as oil prices remain below $30 per barrel, and because of the business constraints due to the coronavirus pandemic.
"We are taking these actions in order to defend our robust balance sheet and the dividend while maintaining the highest standards of safety at work," said ENI CEO Claudio Descalzi.
The cut represents 25% of the company's total planned capex for 2020, and it will slash opex (operating expenditure) by $446 million. In 2021, it expects to cut capex by around $2.8 billion to $3.3 billion, around 30% to 35% of its scheduled capex for that year.
"The projects involved are related mainly to upstream activities, particularly production optimization and new projects developments scheduled to start in the short term," ENI revealed in a press statement. "In both cases, activities will be restarted as soon as appropriate market conditions appear, and related production will be recovered accordingly."
While it did not disclose which projects would be affected, a senior ENI official said last week that the company would revisit it Middle East plans, including its historic exploration agreement with ADNOC for the ultra sour gas Ghasha concession.
The company expects its 2020 and 2021 production to rest between 1.8 and 1.84 million barrels of oil equivalent per day.