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Oil services company Petrofac said it had made further cost cuts on top of suspending its dividend as the Covid-19 crisis crimps construction activity and delays tenders.
Petrofac said it was targeting additional savings to those announced on 6 April, and now expect to reduce overhead and project support costs by at least $125m in 2020 and by up to $200m in 2021.
'In addition, suspension of the final 2019 dividend payment and a 40% reduction in capital investment has conserved an incremental $145m of cash flow,' it said.
Petrofac said Covid-19 had caused a significant disruption to its engineering and construction projects, which, while still progressing, had experienced material delays that won't be recovered in 2020.
A collapse in oil prices had also prompted energy producers to review future investment plans.
'Whilst our bidding pipeline remains healthy and we are well positioned on several opportunities this year, we are now prudently anticipating that the majority of 2020 tenders will be delayed until 2021,' it said.