#Saudi Aramco plans deeper spending cuts to pay for dividend | Financial Times

Saudi Aramco plans deeper spending cuts to pay for dividend | Financial Times:

Saudi Aramco plans to make even deeper cuts to its capital spending to help pay for the $75bn in dividends the state energy group promised investors at its initial public offering last year.

As the company wrestles with the hit to its finances from the coronavirus crisis, Saudi Aramco is now targeting capex of $20bn to $25bn this year, according to three people familiar with the matter. In March it had earmarked $25bn to $30bn, down from last year’s $32.8bn.

The new level of capex, which is largely dedicated to the group’s exploration and production business, is expected to hold for 2021, 2022 and 2023 if oil prices remain at current levels, the people said.

The retrenchment by Saudi Aramco comes after the group on Sunday laid bare the damage the pandemic has inflicted on its profits, which fell 73 per cent in the second quarter.