In the wake of the COVID-19 pandemic, collapsing energy demand and falling oil prices, Chinese and Russian oil companies have announced significant cuts in their 2020 investment plans.
PetroChina plans to reduce its capital expenditure in 2020 by a third, from CNY295bn (US$42bn) to CNY200bn (US$28bn). In addition, the company intends to stabilise oil output and to raise gas production by 5% in 2020. PetroChina also pledged to slash costs by 30%. Sinopec is expected to cut spending by 20%-25% to CNY108-115bn (US$15-16bn). CNOOC has lowered its 2020 capital spending target by CNY10bn (US$1.4bn) to CNY75-85bn (US$11-12bn). Moreover, the company has reduced its 2020 oil and gas output target from 520-530 Mboe to 505-515 Mboe (-3%).
Additionally, Russia’s LNG producer Novatek intends to lower its 2020 capital expenditures by up to 20%, from RUB250bn (US$3.4bn) to RUB200bn (US$2.7bn). The company plans to postpone final investment decision on its 4.8 Mt/year Obsky LNG plant, which was expected to enter production between 2022 and 2024.