Oil giants reduce costs by $60 billion, but it’s not enough
This year, the world oil industry has already reduced the cost by $60 billion, but this is not enough. According to the Bloomberg, the largest producers have to reduce spending by another $26 billion , and investments by 10%.
All this in order to perform the "sacred" payment of dividends, analysts of Jefferies Group LLC, and Banco Santander SA note. The oil companies prepare for a long period of low prices, as the global oversupply is not going to decrease.
The international producers such as Royal Dutch Shell and Chevron, strain every nerve to reach breakeven. They have to do it with oil prices that are by $10 less than last year, when the costs reduction just started, says Jason Gammell of the Jefferies Group.