HOUSTON (Reuters) - Top U.S. oil producers, which already were reining in spending before crude prices started to slip in June, are now looking to trim more fat from their budgets while reminding investors they must spend to grow.
Exxon Mobil Corp (XOM.N) on Friday it would keep its current spending plan intact, though it is about 15 percent less than 2013. ConocoPhillips (COP.N) said it will spend less money next year, and Chevron Corp (CVX.N) said it is looking for budget “flexibility.”
Crude oil prices have slumped 25 percent since June as global supplies grow and demand weakens.
Exxon, which sets budgets using a long-term horizon, still expects to spend a little bit less than $37 billion a year from 2015 to 2017, an executive told investors on Friday on a conference call.
“We always are mindful of what’s happening in the near future but I keep on pulling back that we are a long-term investor,” said Jeff Woodbury, Exxon’s head of investor relations.
Exxon tests projects “across the full range of economic parameters including price” to ensure favorable returns, he said.
The Irving, Texas company saw capital spending peak at $42.5 billion last year when it was advancing projects to deliver future production growth. Exxon has spent $28 billion so far this year, down 14 percent versus the first nine months of 2013.
ConocoPhillips, the largest independent oil and gas company, said on Thursday it plans to spend less than $16 billion next year, below the $16.7 billion it expects to spend in 2014.
“(Capital spending) is going to be lower because of the commodity price environment,” Jeff Sheets, ConocoPhillip’s chief financial officer said in an interview with Reuters. “We have the flexibility in our capital program to reduce it without giving up any opportunities.”
ConocoPhillips has room to slow spending on some exploration projects as well on some of its less developed projects in the Permian Basin, Western Canada and the Niobrara in Colorado, said Sheets.
Even with a 2015 smaller budget, ConocoPhillips still expects to grow its oil and gas output 3 percent to 5 percent. The company’s capital spending plan is due in December.
Chevron Corp (CVX.N), the second-largest oil producer behind Exxon, said Friday it was looking closely at discretionary versus nondiscretionary spending.
“Obviously we are having to have some top discussions around what do we think the price outlook is going to be, what do we think the cost structure is going to be,” said Pat Yarrington, Chevron’s CFO.
But she reminded investors that “we take a long-term view of prices because our investments last for decades.”
So far this year, Chevron has spent $25.7 billion. Last fall it forecast capital expenditures of $39.8 billion for this year.
Exxon and Chevron shares rose more than 1 percent on Friday after they reported third-quarter earnings that topped expectations thanks to higher refining profits.
Additional reporting by Ernest Scheyder in Williston, North Dakota; Editing by Terry Wade