Aramco to cut spending by 25% as oil prices plummet – but it will still fork out £3.2bn in dividends

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.