Aramco to cut spending by 25% as oil prices plummet – but it will still fork out £3.2bn in dividends
- Saudi Aramco racked up costs of almost £27bn last year, but could cut to £20bn
- The state-backed energy giant went public in December in the biggest ever float
- It will pay £3.2bn in dividends for the period December 5 to December 31 2019
Saudi Aramco will slash spending by up to a quarter next year in response to a sharp drop in oil prices.
The state-backed energy giant, which went public in December in the biggest ever float, racked up costs of almost £27billion last year but could cut this to £20billion.
It comes as profits fell by a fifth to £72billion in 2019, compared with £91billion in 2018. Oil prices declined last year but have plunged recently as the coronavirus outbreak hit demand for oil.
Saudi Aramco racked up costs of almost £27bn last year, but could cut this to £20bn
Saudi Arabia then kicked off a price war with Russia, pledging to flood the market with even more cheap crude.
Together these events have seen the oil price almost halve from $59 a barrel to $33 in three weeks.
Amid the price war with Russia, the kingdom has ordered Aramco to ramp up production from 12million barrels per day to 13million. Scaling up the output – and then refining and exporting the oil – will cost billions.
Despite the price squeeze, Aramco will fork out £3.2billion in dividends for the period December 5 to December 31 2019.