Italian oil and gas company Eni is to cut capital and operational expenditure over the next two years due to sharp drops in commodity prices, following similar moves by a number of global energy majors.
Eni will reduce capex by Eur2 billion ($2.2 billion) in 2020, equivalent to 25% of what it originally planned to spend, while opex will be Eur400 million less than intended.
A bigger percentage of scheduled capital expenditure is set to be dropped in 2021, to the tune of Eur2.5 billion-3 billion, or 30%-35% of what was planned.
“The projects involved are related mainly to upstream activities, particularly production optimization and new projects developments scheduled to start in the short term,” Eni said.
“In both cases, activities will be restarted as soon as appropriate market conditions appear, and related production will be recovered accordingly.”
As a consequence of those measures, the company said hydrocarbon production for the next two years was estimated at 1.8 million-1.84 million boe/day.
“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,” CEO Claudio Descalzi said in a statement.