Last checked at 
* Some analysts expect return of scrip dividends
* Breakevens seen on average above current oil price
* European companies more resilient than in last price slump
(Adds Eni comment, updates prices)
By Ron Bousso and Shadia Nasralla
LONDON, March 9 (Reuters) - An oil price plunge means the
world's top energy companies will have to review promises to
return billions to investors, either by slowing down share
buybacks or reintroducing non-cash dividends, analysts said on
Monday.
Brent crude dropped 24% on Monday to $34.36 a barrel
as analysts lowered share price forecasts for top oil and gas
producers.
The Brent benchmark has fallen by as much as a third since
Thursday, just before Russia walked away from an agreement by
the Organization of the Petroleum Exporting Countries to cut
output.
The slide is expected to force a rethink of spending plans
by boards that had cut costs in response to a 2014 oil downturn
when OPEC opened wide the oil taps to try to protect market
share following the U.S. shale oil revolution.
On that occasion, Eni reduced its dividend, while
peers kept up payouts but introduced other austerity measures.
Now the sector is also struggling to retain investor
appetite because of concerns about long-term sustainability as
the world seeks to curb its use of climate-warming fossil fuel.
To try to keep investors on side, the boards of major oil
companies boosted dividends and share buyback programmes. But
even with an average Brent price of $64 a barrel last year, most
companies were hardly able to balance their income with their
spending.
The oil majors were entering "survival mode" in these market
conditions and will have to assess where they can cut spending,
Jefferies analyst Jason Gammel said in a note.
"Buybacks and dividend growth are now almost certainly off
the table, and questions on who will need to cut the dividend
first will be topical," Gammel said.
Last week, Chevron Corp pledged to return up to $80
billion to shareholders over the next five years.
Goldman Sachs said that "depending on the duration of the
crude downcycle," Chevron could taper its buyback programme
while Exxon Mobil Corp could slow down its $33 billion
spending plans in 2020 and dividend growth.
That followed earlier warnings, including from Royal Dutch
Shell Plc that it would slow its $25 billion share
buyback programme as the coronavirus weighs on the global
economy and depresses fuel demand.
BP Plc last month said it would raise its dividend,
even though its profits last year fell by about a quarter.
"We are in unchartered waters at least for the short term,"
analysts at Bernstein said after downgrading their
recommendations for Shell, Eni, Repsol, Total
and Equinor.
Bernstein added in a note it expected divestments to happen
and investments to be reduced, but saw no dividend cuts.
Bernstein analyst Oswald Clint said that breakevens among
European majors had improved since the last downturn.
Since the 2014 crash, companies have cut costs by billions
of dollars, with many configuring their business to withstand
oil prices of around $50 a barrel.
Majors including Total and Royal Dutch Shell, introduced
scrip dividends after the last slump, which allowed them to
issue dividends in the form of shares, rather than cash.
"A return to scrip dividends is not unlikely if this
develops into a 6 month 'price war'," Stuart Joyner, an analyst
at Redburn, said.
Redburn said it expected Total and Chevron to maintain
pay-outs, Shell to pare back its buybacks further and Equinor
and Eni to come under pressure to discontinue current buybacks.
Equinor, Norway's largest oil and gas producer, said on
Monday the company's strong balance sheet put it in a "robust
position" to handle volatility.
Eni said in a statement that it had bolstered its oil and
gas upstream business in recent years in order to make it
"resilient... to cope with similar situations."
U.S. shale producers, which face some of the highest
production costs, on Monday rushed to deepen spending cuts and
reduce future output.
BP and Shell declined to comment. Other majors had no
immediate comment.
(Reporting by Ron Bousso and Shadia Nasralla
Additional reporting by Nerijus Adomaitis in Oslo and Stephen
Jewkes in Milan; editing by Barbara Lewis and Lisa Shumaker)
