Exxon updates on capex, opex

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Exxon updates on capex, opex Exxon updates on capex, opex Exxon updates on capex, opex Exxon updates on capex, opex Exxon updates on capex, opex

Helen Clark

Editor

EXXONMOBIL has offered some firm figures on its planned capital expenditure cuts this year: US$10 billion, or 30% and will cut operating expenses by 15%.
 
The US supermajor earlier suggested it was cutting spending in line with its peers but didn't ascribe a value.
 
The company said overnight it maintains its long term outlook.
 
In Australia it operates the Gippsland Basin Joint Venture in partnership with BHP, Victoria's largest source of gas, and  has a share of the Chevron Corporation-operated Gorgon LNG project in Western Australia.
 
Capex for the year will be $23 billion, down from $33 billion. The opex cut will come from what the oiler calls "deliberate actions to increase efficiencies and reduce costs" and will also include expected lower energy costs.
 
Most of the cuts will affect its Permian Basin holdings, with lower levels of drilling and well completions.
 
Consultancy Rystad Energy recently suggested the company is one of only a handful that can weather the lower prices in the US shale patch given the relatively higher costs. Many struggle to break even much below a $50 per barrel oil price. 
 
The recent West Texas Intermediate prices of $20/bbl have hit hard. 
 
US midcap Whiting Petroleum filed for Chapter 11 bankruptcy last week marking the first casualty of the oil price fall.
 
It has delayed sanction for its Mozambique Rovuma LNG project, as expected. However the Eni-operated Coral LNG development will continue.
 
It has not made any changes to its offshore Guyana Liza oil project, which is currently producing, but it has deferred some work at the Payara development which will delay first oil by six to 12 months.  
 
It said refinery output will decrease "in line with demand and available storage". 
Its 2017 plan, Growing the Gulf, targeting  $20 billion spend on manufacturing facilities on the US Gulf Coast is unchanged.
 
CEO Darren Woods said the move would put the company into a strong position when market conditions improved.
 
"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," he said.
 
"While COVID-19 has had a significant impact on the global economy, we are confident that trade, transportation and manufacturing will recover."
 
The company is prioritising the manufacture of isopropyl alcohol, a hydrocarbon-based alcohol which can be used to make hand sanitiser  and polypropylene, which can be used to make gowns, masks and wipes.

 

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