ExxonMobil this morning announced plans to cut 2020 capital spending by 30%.
The largest portion of the $10 billion in cuts will be in the Permian Basin, the largest U.S. oil field in Texas and New Mexico, The Wall Street Journal reports. ExxonMobil says it will evaluate how the cuts will affect production.
“We haven’t seen anything like we are facing today,” Chief Executive Darren Woods said on a call with reporters today.
Woods says the impact on ExxonMobil oil production this year will be insignificant, but will grow in 2021. In the Permian, production could drop as much as 150,000 barrels a day next year.
ExxonMobil says it expects to meet its projected investment of $20 billion on U.S. Gulf Coast manufacturing facilities, including in Baton Rouge, made in its 2017 Growing the Gulf initiative.
With the announcement, ExxonMobil becomes the latest major oil firm to significantly reduce its budget in response to a crash in oil prices caused in large part by the response to the coronavirus. Chevron Corp. said last month it would cut its spending by $4 billion, or 20%. Large, international oil companies and U.S. shale producers have collectively slashed budgets by tens of billions of dollars. Read the full story.