Left Menu
Development News Edition

Exxon pledges 'significant' spending cuts amid coronavirus, oil slide

Reuters | Updated: 17-03-2020 05:49 IST | Created: 17-03-2020 05:49 IST
Exxon pledges 'significant' spending cuts amid coronavirus, oil slide

Exxon Mobil on Monday said it will make "significant" cuts to spending in the face of the unprecedented slide in oil prices due to the global coronavirus outbreak, which sent its shares to a 17-year low.

It was a stunning reversal for the largest U.S. oil producer, which two weeks ago pledged to "lean in" to the market drop and maintain its outlays in the belief that oil demand would rise in the long run. Other major oil companies have pared costs amid falling demand and newly unbridled output by Saudi Arabia and Russia. U.S. shale companies have outlined plans to cut expenses by 25% to 30% to cope with the massive downturn in oil prices and demand.

The stock market's 13% drop on Monday knocked Exxon shares to $34.49, a level last touched in 2003, and sent its dividend yield to a record 10.1%. "We are evaluating all appropriate steps to significantly reduce capital and operating expenses in the near term,” Exxon Chief Executive Darren Woods said in a statement. "We remain focused on being a safe, low-cost operator and creating long-term value for shareholders."

He did not address whether cuts would affect Exxon's shareholder dividend, which consumed $14.65 billion last year. A spokesman was unavailable for immediate comment. The company earlier budgeted between $30 billion and $33 billion for projects this year, sharply up from the $23 billion it spent in 2017, Woods' first year as CEO.

Exxon could cut 10% to 12% from its outlays and reduce this year's capital spending to between $28 billion and $29 billion, said Matt Murphy, an analyst at Tudor, Pickering, Holt & Co. "Protecting the balance sheet and dividend is the priority for this company," said Murphy, who assigned a low probability to a dividend cut.

Exxon could quickly lower spending in U.S. shale, where it plunked down $6 billion in 2017 for drilling leases in the Permian Basin and where it has run 58 drilling rigs, analysts said. It aimed to pump 1 million barrels a day from the field by 2024. The company also is spending billions of dollars on production off the coast of Guyana, on liquefied natural gas production, and to boost chemicals production along the U.S. Gulf Coast.

Exxon has asked non-essential employees at several locations to work from home to reduce the risk of spreading the coronavirus among its offices and refineries. The world's largest publicly traded oil company, Saudi Aramco, last week outlined plans to cut spending by $2.8 billion to $7.8 billion. BP and Chevron also promised unspecified expense cuts.



In rebuking FBR, Pakistan’s courts take a stand for public health

The system, if implemented effectively, will allow Pakistans revenue service to combat the illicit trade in tobacco products and potentially add hundreds of millions of dollars to the states budget each year. ...

Dissecting how COVID-19 is catalyzing the trajectory of New World Order

The ensuing pandemic of COVID-19 has hit the globalization in two ways firstly, shrinking the importance of globalization as an economic force by curtailing mobility through worldwide lockdowns, and secondly, rejuvenating the idea of indig...

Domestic seafood trade in focus as COVID-19 changes market dynamics

As predicted earlier in a report titled Seafood industry post-COVID 19 An overhaul to trigger the growth of small fisheries, one of the changes going ahead would be increased focus on domestic seafood trade, driven by falling exports and su...

Migration post-COVID 19: Taking cues from the past to rebuild economies

Migrants are an irreplaceable part of even the essential workforce of developed countries and are on the frontline in the fight against the crisis, making an immeasurable contribution to saving the lives of natives with voting rights....


Latest News

WHO warns of 'second peak' in areas where COVID-19 declining

The World Health Organization WHO has warned that countries seeing a decline in COVID-19 infections could still face an immediate second peak if they let up too soon on measures to halt the outbreak. During a media briefing on Monday, Mike ...

Death and denial in Brazil's Amazon capital

As the white van approached Perfect Love Street, one by one chatting neighbors fell silent, covered their mouths and noses and scattered. Men in full-body suits carried an empty coffin into the small, blue house where Edgar Silva had spent ...

Soccer-Peterborough's Fry begs Premier League to bail out EFL clubs

Peterborough Uniteds director of football Barry Fry has pleaded with the Premier League to provide financial aid to prevent English Football League EFL clubs from going bust due to the COVID-19 shutdown. Fourth-tier League Two clubs in Engl...

In land of big data, China sets individual privacy rights

China is poised to enshrine individuals rights to privacy and personal data for the first time, a symbolic first step as more of the country of 1.4 billion people becomes digitized - and more vulnerable to leaks and hacks.The legislation is...

Give Feedback