Saudi Aramco is planning to cut its capital spending to a range of around $20 billion to $25 billion in this year for paying a $75 billion dividend it pledged to the investors during the initial public offering in last year, as reported by the Financial Times on Wednesday, citing people aware of the matter.

The report mentions that the latest level of capital spending is mostly dedicated to the state-owned group's exploration and production business and is going to hold for the coming three years.

Aramco to Cut Capital Spending

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FILE PHOTO: A Saudi Aramco employee sits near its stand at Middle East Petrotech 2016 in Manama, Bahrain, September 27, 2016. REUTERS/Hamad I Mohammed/File Photo

Spending has been cut across the board to shore up cash as the oil industry contends with a realization that lower crude prices could be the norm for a long period of time after the coronavirus pandemic sapped fuel demand.

Aramco had said on Sunday it expected capital expenditure for 2020 to be at the lower end of the original $25 billion to $30 billion range and the company posted a 73 percent plunge in second-quarter profits.

(With agency inputs)