ExxonMobil says it would continue to cut spending as long as crude prices remain low, but added it may look at potential acquisitions in a bid to offset a dip in production.
NEW YORK, March 2 (Reuters) - Exxon Mobil Corp said on Wednesday it would continue to cut spending as long as crude prices remain low, but the world's largest publicly traded oil company added it may look at potential acquisitions in a bid to offset a dip in production.
Exxon, which has a triple-A credit rating, tapped the debt market this week with a $12 billion deal that has led analysts to speculate the oil major may be gearing up for an acquisition spree.
"We have the financial flexibility to pursue attractive opportunities and can adjust our investment program based on market demand fundamentals," Exxon Chief Executive Rex Tillerson said in a statement as he and other company executives met with analysts in New York.
Texas-based Exxon said it expects its capital spending, which has been falling since hitting a peak of $42.5 billion in 2013, to drop next year from the $23.2 billion it now plans to spend this year. It spent $31.1 billion in 2015.
Early last year, Exxon said its average annual spending would be around $34 billion over the next several years.
The company also said on Wednesday that it is on track to start up 10 new oil and gas projects through the end of next year, which would add 450,000 barrels of oil equivalent per day (boed) to its production capacity.
But it expects long-term production of between 4.0 million and 4.2 million boed through 2020, compared to 4.25 million boed in the last quarter of 2015. That outlook is based on a Brent oil price of $40 to $80 a barrel, Exxon said. Brent oil currently trades at just under $37 a barrel.
Oil prices have fallen some 70 percent since mid-2014, prompting major companies to slash budgets for expensive projects designed to bring hard-to-find new discoveries online.
Exxon's oil and gas production rose 3.2 percent in 2015, as the company's downstream refining unit provided some insulation against the impact of falling oil prices on its upstream exploration and production unit.
(Reporting by Michael Erman and Jarrett Renshaw; Editing by Terry Wade and Paul Simao)
Copyright 2017 Thomson Reuters. Click for Restrictions.
WHAT DO YOU THINK?
Click on the button below to add a comment.
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.
Most Popular Articles
From the Career Center
Jobs that may interest you