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Chevron, Exxon Cut Spending on Oil Price Slide

Oil storage tanks sit at the Esso oil refinery, operated by Exxon Mobil Corp. Both companies managed to make a profit during the third quarter, bolstered by refining operations and chemical divisions that are helped by low oil prices. But the two biggest U.S. energy companies were forced to slash costs to stay ahead of plunging revenues from their oil-and-gas production businesses. Chevron, the second-largest energy company in the U.S. by revenue, said it would lay off between 6,000 and 7,000 employees. The San Ramon, Calif., company is trying to dial back its capital spending by 25% next year to between $25 billion and $28 billion. John Watson , Chevron’s chief executive, told analysts that job reductions would be concentrated in Australia as the company completes construction of two giant, liquefied natural-gas projects. Some cuts also will come from West Africa as Chevron reorganizes operations in Angola. Chevron also […]

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Bad timing: Big Oil ramps up output just as prices sink

Lights from the French oil giant Total refinery of Donges are reflected in the water at night, western France, October 23, 2015. After years of declining output, major oil companies have ramped up crude production this year, just as they are being battered by a plunge in prices due to already excessive supplies. Executives have taken pride in seeing billions worth of investments in new technologies and new fields in places such as Brazil, the North Sea and West Africa kick in and boost output. But most of the investment was made three to five years ago when oil was about $100 a barrel, around double current levels. Now, the new production is contributing to a glut in supply due mostly to the North American shale boom, a faltering global economy and OPEC’s decision not to cut output. Recent third-quarter results show the scale of the problem. According to […]

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Conoco producing more in oversupplied market

ConocoPhillips says production, including in war-torn Libya, is strong despite downturn in crude oil markets. File photo by project1photography/Shutterstock HOUSTON, Oct. 30 (UPI) — Nearly across the board, ConocoPhillips reported net production for the third quarter increased at a time when oversupplies are hurting corporate profits. "We are accelerating actions to position our company for low and volatile prices, while improving the underlying performance of the business," said Ryan Lance, chairman and chief executive officer. Net production from the United States, including struggling Alaska, increased for Conoco. From lucrative Texas and North Dakota shale basins, output increased by 10 percent from third quarter 2014. From Canada, production increased 14 percent and, from the Middle East and Asia, output increased by 10 percent from last year. Only in Europe did production decline, down about 1 percent year-on-year. Most of Conoco’s peers reported heavy losses for the third quarter in a […]

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Industry lobbies for Atlantic drilling

Industry groups launch ad blitz in support of oil and gas exploration in the U.S. waters of the Atlantic Ocean. File photo by A.J. Sisco/UPI RICHMOND, Va., Oct. 30 (UPI) — Industry supporters have started an ad blitz in southern U.S. states, arguing offshore oil and gas exploration can exist side-by-side with the environment. North Carolina Petroleum Council Executive Director David McGowan is among those behind a campaign organized with the help of the American Petroleum Industry. McGowan and others say opening Atlantic basins up to oil and gas drillers would bring net benefits to the region. "With new technologies, offshore energy development is safer than ever and continues to drive coastal U.S. economies while existing with tourism and fishing," McGowan said in a statement. The U.S. Interior Department in February released a draft proposal for 2017-22 for access to federal waters. Ten leases are planned for the Gulf […]

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Exxon’s `Leaner Ship’ Floats Higher than Rivals in Downturn

Decades of financial discipline that honed Exxon Mobil Corp. into the leanest, most-efficient oil company in the world are paying off in the worst market slump since the 1980s. As industry job cuts top 200,000 worldwide, Exxon has kept its 75,300-strong workforce intact with none of the sweeping layoffs seen at other oil companies, including its biggest U.S. rival Chevron Corp. “Exxon is just stronger financially than anyone else out there,” Brian Youngberg, an analyst at Edward Jones & Co. in St. Louis, said in an interview. “They were running a leaner ship to begin with.” Exxon posted higher-than-expected third-quarter earnings Friday thanks to soaring profit at its refineries that process oil into fuel. The business has blunted the impact of crude’s collapse. Exxon hasn’t needed to record any of the restructuring charges associated with job eliminations amid the 16-month downturn, and doesn’t expect to do so any time […]

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Chevron Cuts Jobs, Spending, Growth Target as Slump Persists

Chevron Corp. said it’s cutting about 10 percent of its workforce and scaled back its long-term production target amid the worst oil-market slump since the 1980s even as the company posted third-quarter profit that surpassed analysts’ expectations. Chevron said in a statement Friday that it will eliminate 6,000 to 7,000 jobs, the deepest cuts since the 2001 Texaco Inc. merger that created the company in its modern incarnation. Those numbers include a workforce reduction of 1,500 announced earlier this year. Oil and gas output will rise by 13 percent to 15 percent through the end of 2017, rather than the previously forecasted 20 percent production growth, the company said in a slide presentation. The company earned $1.09 a share, 33 cents more than the average of 21 analysts’ estimates compiled by Bloomberg. Profit from refining oil into fuels jumped 59 percent to $2.2 billion. Spending in 2016 will be […]

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Big U.S. shale oil savings fast becoming a thing of the past

Huge cost savings are waning for U.S. shale oil companies, marking an end to the drastic price cuts on equipment and services over the past 16 months that helped them survive the worst industry downturn in six years. Companies including Anadarko Petroleum Corp, ConocoPhillips and Occidental Petroleum Corp have saved millions on drilling and fracking wells in Texas, Colorado and North Dakota since the oil price slide started by demanding that oilfield service companies slash prices by 20 percent to 30 percent or more. Those savings, coupled with big gains in rig productivity that allowed more oil to be pumped with less equipment, created a lifeline for companies coping with a more than 50 percent drop in crude prices. But productivity gains have stalled in the last few months and deflation may be slowing as well, just as producers try to withstand a lower-for-longer price outlook. ConocoPhillips has seen […]

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Exxon third-quarter profit falls 47 percent but beats expectations

A Exxon Mobil gas station is seen in Encinitas, California October 28, 2014. Exxon Mobil Corp ( XOM.N ) said on Friday its third-quarter profit fell 47 percent hit by low crude prices, but results were better than expected, helped by higher profits in the oil company’s refining business. Crude prices have fallen more than 50 percent from last year’s high over $100 a barrel. While the crude decline hurt Exxon’s largest oil and gas business, it also boosted profit margins in refining by lowering feedstock costs. “Quarterly results reflect the continued strength of our downstream and chemical businesses and underscore the benefits of our integrated business model,” Exxon Chief Executive Officer Rex Tillerson said in a statement. The Irving, Texas, company posted profit of $4.24 billion, or $1.01 per share, compared with $8.07 billion, or $1.89 per share in the same quarter a year earlier. Analysts on average […]

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Canadian Oil Sands calls Suncor bid undervalued, exploitive

Canadian Oil Sands says its weathering weak market, recommending shareholders reject unsolicited bid from rival Suncor. Photo courtesy of Canadian Oil Sands CALGARY, Alberta, Oct. 30 (UPI) — While posting a heavy loss for the quarter, Canadian Oil Sands Ltd. said it was advising against what it considers an undervalued bid by rival Suncor. Canadian Oil Sands, among the largest owners in the Syncrude joint venture production group in northern Alberta, said its operating expenses fell to around $5 per barrel, its net debt declined and capital expenses were down 62 percent to $63.5 million. The company said it’s achieved around $750 million in cost reductions during the first nine months of the year. "Canadian Oil Sands is demonstrating its ability to weather this period of low oil prices and even a modest improvement in oil prices will generate robust expansion of cash flow," President and Chief Executive Officer […]

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Oil Firms Face Reality of Sustained Low Prices

LONDON—Some of the world’s largest oil companies reported sharply lower earnings on Thursday as they gave up on some ventures that no longer make sense in a world of crude prices around $50 a barrel. Royal Dutch Shell RDS.A -0.87 % PLC posted a $6.1 billion loss in the third quarter after its decision to walk away from exploring the Arctic for oil and exploiting Canada’s oil sands resulted in $7.9 billion in charges. Petro China Co., the biggest oil-and-gas producer by volume in China, said its third-quarter net profit fell by more than 80%. This unpleasant picture is presented after a third quarter in which Brent crude, the international benchmark for oil prices, traded at about $50 a barrel on average, the lowest sustained levels since the financial crisis. The companies said they were straining to change how they do business as prices are depressed by new supplies […]

Posted On : Published By : Tom Whipple