US oil giant ExxonMobil has announced it will cut $10bn of capital spending in 2020 in response to the coronavirus pandemic, a 30% decrease on its planned $33bn spending for the year.
At the same time, the company said in a statement it would cut its operating expenses by 15% and could make further reductions if needed.
ExxonMobil chairman and CEO Darren Woods said: “The long-term fundamentals that underpin the company’s business plans have not changed – population and energy demand will grow, and the economy will rebound.
“Our capital allocation priorities also remain unchanged. Our objective is to continue investing in industry-advantaged projects to create value, preserve cash for the dividend and make appropriate and prudent use of our balance sheet.”
Like Chevron, and as predicted by analysts at GlobalData, ExxonMobil said it would make most of its spending cuts in the US Permian Basin. It explained this was because short-cycle investments there could be more easily altered with market conditions.
In the statement, a company spokesperson said it will monitor demand levels, but in the meantime, “reduced activity will affect the pace of drilling and well completions.”
The company also deferred a final investment decision on the Rovuma liquefied natural gas project in Mozambique, which it expected to make later this year. It did not give a new date.
However, ExxonMobil said it would not change its timeline for developing reserves offshore Guyana. It will also meet its investment target of £20bn in the US Gulf Coast.