Energy group OMV considers job cuts, plans further cost savings

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VIENNA (Reuters) – Oil and gas group OMV (VI:) plans to extend a 4 billion euro ($4.35 billion) cost-cutting programme, its chief executive said, adding it may cut jobs due to the coronavirus crisis and a slump in energy prices.

Major oil producers with operations around the world have cut their 2020 capital spending by about 25%, or nearly $55 billion, following the drop in crude prices.

“I expect… further cost savings programmes this year,” OMV chief executive Rainer Seele told German daily Handelsblatt in an interview published on Wednesday.

OMV has already said it would cut spending by about 20% this year and has reached a deal to pay for its $4.7 billion stake increase in plastics maker Borealis in stages.

“We have not yet made a decision about short-time work or staff reductions. It is a possibility we cannot rule out,” the company’s CEO told Handelsblatt.

OMV, which has a global workforce of around 20,000, said its output fell to 472,000 barrels of oil equivalent per day in the first quarter from 505,000 boe/d in the fourth quarter.

The average realized price fell to $46.8 in January-March, from $61 in the three months through December, said OMV, which will publish first-quarter results on April 29.

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