Fortifying Its Financial Position, Royal Dutch Shell Reduces 2020 Spending and Suspends Share Buybacks

In response to the current market volatility, Royal Dutch Shell (NYSE: RDS.A) (NYSE: RDS.B) announced several steps yesterday that it's taking in order to "reinforce the financial strength and resilience of [its] business so that [it's] well-positioned for the eventual economic recovery." For one, the oil major plans on reducing its operating costs by $3 billion to $4 billion over the next twelve months from the $37.9 billion in operating expenses it reported in 2019.

In addition, the company intends to be more frugal with its capital expenditures in 2020, planning on a $5 billion reduction in spending -- 15% lower than its capex spending last year. According to Shell, if it's successful in implementing its cost-reduction measures, it will translate to $8 billion to $9 billion in free cash flow on a pre-tax basis.

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Source Fool.com