By Giulia Petroni 
 

OMV AG said Thursday that it would reduce its organic investments in 2020 to safeguard its economic stability in response to the coronavirus pandemic.

The Austrian oil-and-gas company said the executive board has approved an action plan valued at more than 4 billion euros ($4.33 billion) that involves the reduction of around EUR500 million in organic investments for 2020. This represents a reduction of more than 20% from the originally planned investments of EUR2.4 billion.

OMV is also cutting costs related to operational expenditure and exploration expenditure by around EUR200 million compared with 2019.

The company will postpone investment and acquisition projects for a total of EUR1.5 billion, it said, in particular for what concerns the interest in Achimov in Russia.

"These measures will safeguard OMV's ability to act in this challenging situation," Chief Executive Rainer Seele said.

OMV said the payment for the acquisition of an additional 39% stake in Borealis AG from Mubadala Development Company PJSC will be executed in two tranches and therefore more than EUR2 billion won't be due until the end of 2021. The closing date of the transaction won't be affected, it said.

 

Write to Giulia Petroni at giulia.petroni@wsj.com

 

(END) Dow Jones Newswires

March 26, 2020 06:08 ET (10:08 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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