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Friday, May 1, 2020
ExxonMobil announced that it is reducing its 2020 capital spending by 30 percent and lowering cash operating expenses by 15 percent in response to low commodity prices resulting from oversupply and demand weakness from the COVID-19 pandemic.
Capital investments for 2020 are expected to be about $23 billion, down from the previously announced $33 billion. Reduced spending is being achieved through increased efficiencies, lower market prices, and slower project pace including the U.S. Permian Basin, Rovuma LNG in Mozambique, and expansions of downstream and chemical facilities. The 15 percent decrease in cash operating expenses is driven by increased efficiencies, reduced activity, and lower energy costs. ExxonMobil continues to monitor market developments and evaluate additional reduction steps.
The Rovuma LNG project, which will produce from a deepwater block off Mozambique containing more than 85 trillion cubic feet of natural gas, was expected see its FID in H1 2020, but in March when the supermajor initially indicated Capex cuts were coming, that go ahead seemed unlikely in light of the current COVID-19 pandemic and non-economic oil prices.
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