Exxon to cut spending but sees production rising
NEW YORK (AP) — Exxon Mobil Corp. says it will cut capital spending by 6 percent this year and overall production will be flat.
The shares fell nearly 3 percent.
The nation’s biggest oil company said Wednesday that it will spend $39.8 billion on energy projects and other costs this year, down from $42.5 billion last year.
Exxon said that barring acquisitions, annual spending will average less than $37 billion from 2015 to 2017.
Production is expected to be the equivalent of 4 million barrels of oil per day, the same as 2013 after excluding an expired deal in the United Arab Emirates and partial sale of a project in Iraq, the company said. In 2015 through 2017, production is expected to rise by about 100,000 barrels per day each year.
The company said production of liquids such as oil — more lucrative right now — would grow 2 percent this year, but the company is letting natural gas production ease in the U.S., where gas prices are low.
Executives made the comments during the company’s annual investor meeting in New York.
Analysts have criticized Big Oil for not boosting production enough. Energy companies face high costs in extracting new and harder-to-reach sources of oil and gas. Still, Exxon said that its exploration activities are continuing to find enough oil and gas reserves to more than replace the energy that it produces.
Irving, Texas-based Exxon expects to start production at a record 10 major projects this year, adding about 300,000 barrels a day in new capacity. The new projects include a liquefied natural gas operation in Papua New Guinea and an offshore oil and gas platform in Russia. CEO Rex Tillerson said the projects would provide profitable new volume.
In the next few years, the company expects to boost production by about 1 million barrels per day from projects in Indonesia, Canada and elsewhere.
Exxon shares fell $2.73, or 2.8 percent, to $93.79. They began the day down 5 percent in 2014 after rising 17 percent in 2013.