Home >Companies >News >Saudi Arabian oil giant Aramco plans huge spending cut for 2021
Aramco's capex for this year will be at the lower end of the $25 billion-to-$30 billion range set in March (REUTERS)
Aramco's capex for this year will be at the lower end of the $25 billion-to-$30 billion range set in March (REUTERS)

Saudi Arabian oil giant Aramco plans huge spending cut for 2021

  • Saudi Aramco may keep capex, most of which is spent on exploration and production, at a similar level until at least 2023, the people said

Saudi Arabia’s state oil company plans to cut capital expenditure to $25 billion or less next year, about half the amount it was originally planning, according to people familiar with the matter.

Saudi Aramco may keep capex, most of which is spent on exploration and production, at a similar level until at least 2023, the people said, asking not to be named as the matter isn’t public yet.

The Dhahran-based firm is having to slash some spending as it looks to keep a promise to pay shareholders a $75 billion dividend this year, despite coronavirus lockdowns causing the price of oil to crash.

The company also wants to keep spending reined in while its gearing ratio, debt as a portion of equity, exceeds its target range of 5% to 15%.

Capex for this year will be at the lower end of the $25 billion-to-$30 billion range set in March, Chief Executive Officer Amin Nasser said on Sunday as Aramco announced second-quarter results. A day later, he said 2021 capex would be “significantly" lower than the company’s official guidance of $40 billion to $45 billion.

“We have placed capital expenditures for 2021 and beyond under review," a spokesperson said in a statement on Wednesday. “We analyze future projects based on strategic, operational, commercial and financial targets."

The Financial Times first reported the spending cuts earlier.


This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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