ExxonMobil has announced that it will be reducing its 2020 CAPEX by 30% and lowering Cash OPEX by 15% in response to low commodity prices resulting from oversupply and demand weakness caused by the COVID-19 pandemic.
Capital investments for 2020 are now expected to be about US$23 billion, down from the previously announced US$33 billion. The 15% decrease in cash operating expenses is driven by deliberate actions to increase efficiencies and reduce costs, and includes expected lower energy costs.
“After a thorough evaluation of the impacts of the pandemic and market conditions, we have worked closely with business partners to plan and execute capital adjustments that preserve long-term value, maximise cost efficiency, and put us in the strongest position when market conditions improve,” said Darren Woods, Chairman and CEO of Exxon Mobil Corporation.
“The long-term fundamentals that underpin the company’s business plans have not changed – population and energy demand will grow, and the economy will rebound. Our capital allocation priorities also remain unchanged. Our objective is to continue investing in industry-advantaged projects to create value, preserve cash for the dividend and make appropriate and prudent use of our balance sheet.”
ExxonMobil continues to monitor market developments and can exercise additional reduction options if required. As market conditions evolve, the company will continue evaluating the impacts of decreased demand on its 2020 production levels as well as longer-term production impacts.
A final investment decision (FID) for the Rovuma LNG project in Mozambique, expected later this year, has been delayed. ExxonMobil continues to actively work with its partners and the government to optimise development plans by improving synergies and exploring opportunities related to the current lower-cost environment. The Coral LNG development continues as planned.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/08042020/exxonmobil-to-reduce-expenditure-in-response-to-covid-19/