Shelter from the storm

2 April 2020 By George Hay Follow @gfhay

Shares in the world’s big five listed crude producers are down by over a third since January. Yet despite the global oil slump, their dividends look secure for now. Rock-bottom prices would have to last well into 2021 for credit ratings or payouts to be in serious doubt.

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BP said on April 1 it would cut planned 2020 capital spending by a quarter to $12 billion, roughly in line with already announced moves by rivals Royal Dutch Shell and Total.

The UK oil giant said part of the capex cut would come from reining in investment in U.S. shale, which the company recently augmented by buying assets from BHP.

BP also said it had about $32 billion of cash and undrawn facilities.

Brent crude futures were trading at $27.5 a barrel on April 2, up 11%, after China said it would add to oil stockpiles and U.S. President Donald Trump predicted an agreement on supply with Russia and Saudi Arabia “within days”.

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