While a bit late to the party, Exxon Mobil (XOM) is doing what the rest of the world has already been doing: cutting costs and scaling back on expenses.
The oil and natural gas giant on Tuesday announced plans to cut back its multi-year investment efforts in shale, natural gas and deep-water oil production and also said it will cut capital spending this year by $10 billion as the coronavirus pandemic has slammed both energy demand and oil prices.
The largest U.S. oil producer announced that it has set its 2020 capital expenditures at $23 billion, and may reduce that even further if warranted. Exxon had previously announced expected spending plans of as much as $33 billion this year. It spent $26 billion last year.
The company said its biggest spending cuts will focus on its operations 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.”
That move comes on the heels of a White House meeting of major oil and energy company executives, who have been grappling not only with the pandemic’s impact on global energy demand but a war of brinkmanship between Saudi Arabia and Russia that has produced a global oil supply glut and plunged prices to depths not seen since the 2008 financial crisis.
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