Saudi Aramco plans to further cut capital expenditure (Capex) in an attempt to try and pay for the $75 billion dividends that were promised to investors, according to the Financial Times.
Saudi Aramco is now reported to be targeting a Capex budget of $20bn to $25bn this year. In March this figure was earmarked at $25 billion to $30 billion, down from 2019’s total of $32.8bn. The Capex, which is predominantly put towards exploration and production (EP), is expected to hold for 2021, 2022, and 2023 if oil prices remain at current levels.
The desire of the company is to pay the dividends by means of cash generated by its operations, however, CEO Amin Nasser has not ruled out the option of taking out loans or issuing bonds to finance the pay-outs.
The company’s debt levels have been compounded by the company’s recent $69 billion deal for a majority stake in SABIC.