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Researched by Industrial Info Resources (Sugar Land, Texas)--Exxon Mobil Corporation (ExxonMobil) (NYSE:XOM) (Irving, Texas) made it official on Tuesday, saying it is cutting 2020 capital spending by 30% and lowering cash operating expenses by 15% in response to low energy commodity prices resulting from oversupply and demand weakness due to the COVID-19 pandemic. Among other things, the energy giant is targeting expenditures in the Permian Basin, where
ExxonMobil first signaled in a March 16 press release that it was looking to tighten its capex belt.
On Tuesday, the company said capital investments for 2020 are now expected to be about $23 billion, down from the previously announced $33 billion. The 15% decrease in cash operating expenses "is driven by deliberate actions to increase efficiencies and reduce costs, and includes expected lower energy costs," it added.
"The largest share of the capital spending reduction will be in the Permian Basin, where short-cycle investments can be more readily adjusted to respond to market conditions, while preserving value over the long term," ExxonMobil said in a press release. "Reduced activity will affect the pace of drilling and well completions until market conditions improve."
As late as February, the Permian was touted as a focal point of ExxonMobil's production growth plans. Chief Executive Officer Darren Woods said during the company's quarterly earnings conference call that ExxonMobil would raise Permian production from 4 million to 5 million barrels of oil-equivalent per day in 2020. For more information, see February 4, 2020, article - ExxonMobil Defies Dismal Energy Market, Sticks to Spending Plans--Including U.S. Drilling.
The company also said a final investment decision for the Rovuma liquefied natural gas (LNG) project in Mozambique, which was expected later this year, has been delayed. Industrial Info is tracking six Rovuma projects amounting to more than $20 billion. Click here for a list.
ExxonMobil said operations onboard the Liza Destiny production vessel offshore Guyana are unaffected, and the startup of the second phase of field development remains on target for 2022, with the Liza Unity production vessel currently under construction. Click here for a list of related projects.
ExxonMobil said it still expects to meet its projected investment of $20 billion on U.S. Gulf Coast refining and petrochemical facilities in its 2017 "Growing the Gulf" initiative. The company said it also expects to reach its proposed U.S. investment of $50 billion over five years announced in 2018. For more information, see June 14, 2019, article - ExxonMobil-SABIC Chemical Project Is One of Several Planned to Start Construction This Year in Texas, Louisiana.
Plains All American
Also on Tuesday, Plains All American (NYSE:PAA) (Houston, Texas) said it was reducing its 2020-2021 capital program by $750 million, or 33%. Expansion capital for the period is now targeted at $1.55 billion, the company said in a press release. In addition, the company's $600 million of assumed joint-venture project financing for the Red Oak pipeline project has been deferred, the company said. The Red Oak crude oil pipeline will transport oil from Cushing, Oklahoma, and the Permian to multiple locations on the Texas Gulf Coast. Construction on the pipeline was planned to begin this summer, with completion slated for the first half of next year. Click here for related projects and see March 27, 2020, article - $2.1 Billion and Counting: COVID-19, Oil Crash Slam Texas Oil & Gas Projects
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
ExxonMobil first signaled in a March 16 press release that it was looking to tighten its capex belt.
On Tuesday, the company said capital investments for 2020 are now expected to be about $23 billion, down from the previously announced $33 billion. The 15% decrease in cash operating expenses "is driven by deliberate actions to increase efficiencies and reduce costs, and includes expected lower energy costs," it added.
"The largest share of the capital spending reduction will be in the Permian Basin, where short-cycle investments can be more readily adjusted to respond to market conditions, while preserving value over the long term," ExxonMobil said in a press release. "Reduced activity will affect the pace of drilling and well completions until market conditions improve."
As late as February, the Permian was touted as a focal point of ExxonMobil's production growth plans. Chief Executive Officer Darren Woods said during the company's quarterly earnings conference call that ExxonMobil would raise Permian production from 4 million to 5 million barrels of oil-equivalent per day in 2020. For more information, see February 4, 2020, article - ExxonMobil Defies Dismal Energy Market, Sticks to Spending Plans--Including U.S. Drilling.
The company also said a final investment decision for the Rovuma liquefied natural gas (LNG) project in Mozambique, which was expected later this year, has been delayed. Industrial Info is tracking six Rovuma projects amounting to more than $20 billion. Click here for a list.
ExxonMobil said operations onboard the Liza Destiny production vessel offshore Guyana are unaffected, and the startup of the second phase of field development remains on target for 2022, with the Liza Unity production vessel currently under construction. Click here for a list of related projects.
ExxonMobil said it still expects to meet its projected investment of $20 billion on U.S. Gulf Coast refining and petrochemical facilities in its 2017 "Growing the Gulf" initiative. The company said it also expects to reach its proposed U.S. investment of $50 billion over five years announced in 2018. For more information, see June 14, 2019, article - ExxonMobil-SABIC Chemical Project Is One of Several Planned to Start Construction This Year in Texas, Louisiana.
Plains All American
Also on Tuesday, Plains All American (NYSE:PAA) (Houston, Texas) said it was reducing its 2020-2021 capital program by $750 million, or 33%. Expansion capital for the period is now targeted at $1.55 billion, the company said in a press release. In addition, the company's $600 million of assumed joint-venture project financing for the Red Oak pipeline project has been deferred, the company said. The Red Oak crude oil pipeline will transport oil from Cushing, Oklahoma, and the Permian to multiple locations on the Texas Gulf Coast. Construction on the pipeline was planned to begin this summer, with completion slated for the first half of next year. Click here for related projects and see March 27, 2020, article - $2.1 Billion and Counting: COVID-19, Oil Crash Slam Texas Oil & Gas Projects
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
