Saudi Arabia announced an additional voluntary reduction in oil production by 1 million barrels per day, bringing production to its lowest level in 18 years.
Riyadh plans to produce a little less than 7.5 million barrels per day in June, lower than the figure agreed in the latest OPEC + agreement. According to data compiled by Bloomberg, if Saudi Arabia follows this, its production will fall to its lowest level since mid-2002.
Such also demonstrates the urgent need for Riyadh to stabilize the market, as low prices force it to introduce austerity measures, including tax increases and the cessation of monthly salary increases for millions of public servants.
The purpose of this additional reduction is to encourage OPEC + participants, as well as other producing countries, to fulfill their obligations to reduce production, and to provide additional voluntary reductions in order to maintain stability in global oil markets.
USA:
Continental Resources cut about 70% of its production in May and abandoned drilling rigs, which cancelled nearly 40% of the new wells it planned to commission this year.
Callon Petroleum also plans to cut more than 3,000 barrels per day of oil production in May.
The CEOs of many companies said that production cuts are already taking place, whether on behalf of OPEC + members, or on the grounds of low prices. This means that most large companies will produce less oil and gas in the second quarter.
US production is already falling. Exxon Mobil, Chevron Corp and ConocoPhillips plan to cut production to 660,000 barrels per day by the end of June. Shell and BP (British Petroleum) are removing drilling rigs from Perm.
British Petroleum reported that they contacted the Middle East, Russia, Angola and Azerbaijan - all members of OPEC + - to reduce oil production.
The BP mechanism, the ratio of net debt to equity, in the first quarter grew from 5% to 36%. Despite the fact that part of this increase was the result of a temporary increase in working capital, it is currently unknown when the proportion to its comfortable range from 20% to 30% will be restored.
For many oil companies, total cash from operating activities fell by 29%, which are not enough for dividend payments, interest payments, operating expenses and investments.
Companies have resorted to selling bonds and raising new credit to maintain liquidity. Some have questioned how long they can accumulate debts.
