Exxon Mobil, Chevron settle for production cut
By AFP
Following acute industrial downturn, Exxon Mobil and Chevron, have resolved to curtail some production.
The oil giants are to slash capital spending in response to the coronavirus crisis that has impacted negatively on global economy.
The announced the belt-tightening moves as they reported first quarter results, a period that saw oil prices retreat, but which preceded the first-ever drop in US crude futures to negative territory in April.
Results are expected to be far worse in the second quarter.
Exxon Mobil — which reported its first quarterly loss in decades Friday — said it would curtail 400,000 barrels of oil-equivalent per day in the second quarter for “economic” reasons.
Exxon Mobil Chief Executive Darren Woods said the company expects a difficult second quarter, but he pointed to “encouraging” signs in China as it has begun to ramp up its economy following coronavirus shutdowns. Some US states have also lifted shelter-in-place directives in recent days.
“The basic drivers of energy demand have not changed because of what we say today,” said Woods, who added the company remained committed to investing in new energy projects in expectation of a rebound.
“It’s a really a question of time,” Woods told an analyst conference call, adding that the company could further trim its spending if needed.
Shares of both companies fell, but Exxon Mobil dropped much more significantly as the company faced skeptical questions from analysts over its strategy.
Exxon Mobil reported a $610 million loss for the first quarter, compared with $2.4 billion in profits in the year-ago period. Revenues fell 11.7 percent to $56.2 billion.
The loss included $2.9 billion in non-cash costs on inventory and assets because of low commodity prices.
Exxon Mobil reduced capital spending by 30 percent to around $23 billion for 2020 and will trim operating expenses by 15 percent.
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