In response to the current market volatility, Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) announced several steps yesterday that it's taking in order to "reinforce the financial strength and resilience of [its] business so that [it's] well-positioned for the eventual economic recovery." For one, the oil major plans on reducing its operating costs by $3 billion to $4 billion over the next twelve months from the $37.9 billion in operating expenses it reported in 2019.

In addition, the company intends to be more frugal with its capital expenditures in 2020, planning on a $5 billion reduction in spending -- 15% lower than its capex spending last year. According to Shell, if it's successful in implementing its cost-reduction measures, it will translate to $8 billion to $9 billion in free cash flow on a pre-tax basis. 

The silhouettes of workers and machinery in an oilfield at dawn.

Image source: Getty Images.

The company, moreover, continues to seek divestments of about $5 billion in 2020, but it notes that this is subject to market conditions. Regarding its share buyback program, Shell remains committed to the current $1 billion tranche, which was announced on Jan. 30. However, it will not continue the program with the next tranche. Since the beginning of the share buyback program in July 2018, Shell has bought back $15.5 billion in stock. The program allows for total share buybacks of $25 billion. 

While the company announced several initiatives to help secure its finances, there was no mention of it reducing its dividend.