The CEO of Qatar Petroleum said that the company plans to reduce its spending by about 30% this year in the face of a sharp drop in oil and gas prices, due to the Corona virus epidemic.
Saad Al-Kaabi told an online seminar organized by the American-Qatari Business Council that Qatar Petroleum was still moving ahead with plans to expand LNG production capacity by the middle of the decade, according to Reuters.
It is noteworthy that the global energy markets faced with the spread of the Corona virus, under great pressure, in light of the decline in crude and gas prices and the decline in the level of demand with the stopping of the movement of domestic and external aviation in most countries to curb the virus.
“We are working on budget reviews … In June, we will have cut spending by 30%, capital and operating,” he said.
Al-Kaabi indicated that natural gas prices suffered less due to the constant demand for electricity.
He emphasized, however, that Qatar Petroleum would go ahead with plans to significantly expand its production by 2024. “We are going at full speed, and we will expand,” he said.
He explained that he expects that once the capital costs of the project become clear in the coming months, a number of major international companies, such as Exxon Mobil, Chevron and ConocoPhillips, will participate in the bids.
The cut in costs comes days after Al-Kaabi informed the company’s employees in an internal memo that planned cuts of employment would be finalized after the Eid holidays.
Al-Kaabi stressed that “the current economic situation makes the company take steps to reduce the cost, and this is what we have done in the past weeks, and we have been able to reduce the cost, but we still want to reduce it further.”
Job cuts and planned costs will be the third wave of restructuring of Qatar Petroleum over the past six years. In 2015, the company said it cut its staff numbers as part of the restructuring, and decided to exit from all non-core businesses, following a sharp drop in oil and gas prices and imposed additional financial pressure on Diameter.