US, WASHINGTON (ORDO NEWS) — British oil company BP cut its spending plan for 2020 by 25% and will cut production in its shale oil and gas business in the US due to the recent drop in oil prices due to coronavirus, the company said. Reuters.
A London-based company said it plans to spend $ 12 billion this year compared to the previously planned $ 15 billion.
The cuts also relate to a $ 1 billion reduction in shale investment, known as BPX, where production can be turned on and off relatively quickly.
BPX production will drop by about 70 thousand barrels of oil equivalent per day in 2020.
BP’s total oil and gas production is also expected to decline.
In early March, Saudi Arabia, as one of the leaders of the Organization of Petroleum Exporting Countries (OPEC), lowered its official oil selling prices by announcing its intention to increase production after Russia refused to extend the deal to reduce production (OPEC +).
This announcement was perceived by many on the market as the beginning of a price war; later on, this led to a fall in world oil prices. Since then, a sharp decline in demand due to travel bans amid the spread of coronavirus in the world has led to an even greater price collapse.
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