(Reuters) – Refiner Phillips 66 <PSX.N> on Tuesday cut its 2020 spending forecast by about 18% and assured investors their dividend was secure even as the coronavirus outbreak and a price war between Saudi Arabia and Russia threaten the oil market with massive oversupply.
As U.S. crude prices last week touched their lowest point in nearly two decades, oil and gas companies are rushing to cut back on their spending so they can maintain profitability and calm worried investors about their ability to pay dividends.
Oil major Chevron on Tuesday cut its spending budget by 20% and also committed to protecting its dividend.
Phillips 66 said it now expects consolidated spending for the year to be about $3.1 billion, a $700 million reduction from its earlier forecast.
“We are taking action to maintain our financial strength to ensure security of our dividend, execute capital growth projects that are near completion, and maintain our strong investment grade credit rating,” Phillips 66 Chief Executive Officer Greg Garland said in a statement.
(Reporting by Shariq Khan in Bengaluru; Editing by Shinjini Ganguli)