ConocoPhillips will voluntarily cut oil production, spending and share buybacks as the worst crude-price crash in a generation threatens to fill storage to the brim.
The Houston-based explorer will curtail 225,000 gross barrels of oil per day, it said Thursday in a statement. The announced cuts in capital spending, operating costs and share repurchases adds US$3 billion beyond the US$2.2 billion previously announced.
The COVID-19 pandemic has slashed oil demand globally, forcing producers to scale back as the U.S. begins to test physical storage capacity and crude prices tumble to an 18-year low. In Texas, a growing chorus of explorers and related industries are advocating mandated output cuts, a move that hasn’t been made there in almost 50 years.
Conoco’s cuts come less than a month after the company first reduced spending and pared back its buyback program, indicating its view that the downturn is much worse than initially feared. The buyback was a core part of CEO Ryan Lance’s 10-year plan, announced just last November, to be a slow-growth but high return oil company in almost any oil price environment.
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