Johan Sverdrup oil field in the North Sea west of Stavanger, Norway. Photo: Getty Images
The multinational oil giant Equinor said Thursday that it's sharply cutting its first quarter dividend payouts by 67% compared to the prior quarter, citing "unprecedented market conditions and uncertainties."
Why it matters: Norway-based Equinor is the first oil major to cut dividends due to the pandemic-fueled collapse in oil prices and demand.
- And they may not be the last. PVM Oil Associates analyst Tamas Varga tells CNBC that other oil-and-gas giants might follow suit.
- “Clearly, suspending share buybacks and cutting capex (capital expenditure) does not do the trick anymore. In these turbulent times cash is king and the battle for remaining financially sound intensifies,” Varga said.
The big picture: Oil majors including Equinor have already been cutting spending and suspending share buybacks due to the crisis.
- More broadly, oil companies and contractors across the board have been cutting back amid the price collapse.
- Just this week the oilfield services giant Halliburton posted a $1 billion first-quarter loss and, per the Houston Chronicle, has laid off almost 1,200 people in the U.S. this month.