March 18, 2020 / 6:38 PM / 2 months ago

Eni to cut spending and buyback plans due to coronavirus fears

MILAN, March 18 (Reuters) - Italian energy group Eni followed rivals on Wednesday by cancelling a share buyback and sharply cutting investments as a result of the coronavirus outbreak and falling oil prices.

"Eni's priorities at the moment are safeguarding the health of our people and the communities we operate in, as well as our robust balance sheet and the dividend," Eni CEO Claudio Descalzi said in a statement.

Oil prices plunged on Wednesday after Goldman Sachs said lockdowns to counter the coronavirus pandemic raised the prospect of the steepest ever annual fall in oil demand.

ConocoPhillips, the largest U.S. independent oil producer, on Wednesday pared its proposed spending, production and share buybacks for the year.

Exxon Mobil, BP and Chevron have also promised unspecified spending cuts.

"This revision will consider a strong reduction in the Capex and expected costs to levels that are consistent with the new price scenario," Descalzi said, giving no further details.

Eni, which at the end of February pledged to spend 32 billion euros ($35 billion) in its new four-year plan, said it was downgrading its Brent forecasts to $40-45 in 2020 and $50-55 in 2021 compared to a $60 per barrel scenario for upstream free cash flow in its recent plan.

It said it would be withdrawing plans it had to buy back 400 million euros of shares this year, adding it would reconsider a buyback when Brent was at least $60 per barrel.

$1 = 0.9233 euros Reporting by Stephen Jewkes; editing by David Evans

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