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Royal Dutch Shell plc. rapidly raised after announcement

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Royal Dutch Shell plans to lower spending by $5 billion and suspended its vast $25 billion share buyback plan in an effort to weather the recent collapse in oil prices, it said on Monday. Shell has so far purchased $15.5 billion of shares since the buyback program started in July 2018. Based on Shell’s speech reduction will be further by an additional $3 billion to $4 billion over the next 12 months. According the company’s calculations operating costs will be reduced by an additional $3 billion to $4 billion over the next 12 months.

Comparing to 2019 company plans to reduce operational costs by $3B-$4B p.a. over the next 12 months. Company will reviewing spending to achieve the targeted cuts in all of Shell’s business segments.

The reason of company’s rapid steps are crash of oil prices by more than 60% since January, hit by global demand destruction because of the coronavirus pandemic and a price war between top producers Saudi Arabia and Russia after this month’s collapse of a supply pact between the Organization of the Petroleum Exporting Countries (OPEC) and its allies.

After announcement Shell’ shares raised during first trading day of the week by 3,48% on the London Stock Exchange.

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