Exxon, Shell's Spending Patterns May Help Them Through Oil Price Drop
LONDON, March 10 (Reuters) - The world's two biggest oil firms, Exxon Mobil Corp and Royal Dutch Shell, may withstand the oil price collapse better than their rivals because they are closer to finishing expensive investment projects while others must keep spending.
The near halving of oil prices since June is likely to send all the biggest listed oil companies into negative cash flow this year, and has sparked a rush to cut costs across the sector as a result. But depending on where they are in their spending cycles, some companies are finding those cuts easier to make than others.
"Both (Exxon and Shell) had already entered a lower spending phase, with major projects reaching completion and coming on stream over the next two years," Moody's rating company said in a report.
Exxon started eight major oil and gas production projects last year in locations ranging from Papua New Guinea to the Gulf of Mexico and Abu Dhabi.
Shell started four big production start-ups last year in the Cardamom and Mars B oil fields in the Gulf of Mexico as well as other oil fields in Nigeria and Malaysia.
As a result Exxon, the world's biggest publicly traded oil company, was able to cut its 2015 project spending by 11 percent to around $34 billion without significant impact on its production. Shell, the second-largest, opted for a $15 billion cut over the next three years and maintained its 2015 capital spending at $35 billion which will also not affect its output.
Chevron and Total, on the other hand, are both in the midst of large project spending cycles, and will have to tap into more debt in order to stay afloat, Moody's said.
1234
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- I Squared Eyes Full Ownership of Europe Gas Storage Firm
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension