In his address, Pouyanné recalled the resilience that the Group’s teams demonstrated during the 2015 – 2016 oil crisis as well as the two pillars of the Group’s strategy which are the organic pre-dividend breakeven of less than US$25/bbl and the low gearing to face this high volatility.
In a context of oil prices on the order of US$30/bbl, he announced an action plan to be implemented immediately based on the following three axes:
- Organic CAPEX cuts of more than US$3 billion, i.e. more than 20%, reducing 2020 net investments to less than US$15 billion. These savings are mainly in the form of short-cycle flexible CAPEX, which can be arbitrated contractually over a very short time period.
- US$800 million of savings in 2020 on operating costs compared to 2019, instead of the US$300 million previously announced.
- Suspension of the buyback program – the company announced a US$2 billion buyback for 2020 in a US$60/bbl environment; it bought back US$550 million in the first two months.
