One of the largest oil producers will cut production by 30%
Continental Resources, one of the largest producers of shale oil in the U.S., decided not to pay quarterly dividends due to the global drop in oil prices amid the spread of the coronavirus epidemic, reports MarketWatch.
The company's management also reported that since the world consumption of oil decreased by about 30%, Continental Resources will reduce production at about the same level.
Over the past three months, the company's shares have fallen by 73%, while S&P downgraded its rating to BB+.
The head of Continental Resources Harold Hamm expressed hope that the company will be able to recover its position in the third and fourth quarters, and now it is important to save the industry, reports Forbes.
The publication points out that due to a significant decrease in demand for oil, shale companies have no guarantees to restore their positions even in case of OPEC+ agreements between Russia and Saudi Arabia. However, the US is trying to persuade Riyadh to go for an agreement, hoping that it will improve the situation.
Bloomberg sources previously reported that Russian authorities may approve the reduction of production in the country by 1 million barrels per day. Russia may not like the option of reducing production by 1.5 million barrels per day, which may be insisted on by other negotiators, one of the agency's sources said.
On March 20, Bloomberg reported that oil and gas companies cut their investment budgets by a total of US$31 billion due to fears of further value fall. According to the agency, Saudi Arabian Oil Co., French Total, as well as Wintershall DEA, among others, decided to seriously cut their investments.