ConocoPhillips to Cut Another $200 Million of Alaska Spending
April 20, 2020
ConocoPhillips reports another $200 million spending cut for Alaska, this cut adds to those already made, as oil prices fall amid the Covid-19 pandemic.
ConocoPhillips made an initial cut in capital spending in March, before announcing another $200 million cut earlier this week in response to the large oil price drop worldwide. We expect prices in the coming months to be weak and volatile," confirmed Chief Executive Officer (CEO) Ryan Lance to the Alaska Journal of Commerce.
The price of Alaska North Slope crude fell to$16.65 per barrel last Wednesday, the lowest price since January 2002, the Alaska Treasury Department confirmed.
The statement is released a week after the Houston-based company told its drilling contractor North Slope Doyon Drilling, which in turn removed its staff and drilling equipment to reduce the risk of Covid-19 contagion among workers, this means that drilling rigs will stop working and put on storage for a long period of time.
ConocoPhillips is bracing for a negative impact of approximately 2,000 barrels per day to the North Slope, as a result of low drilling for the remainder of 2020.
"Plans to drill seven exploration wells at the Alaska National Petroleum Reserve this winter are in the past, for now," the company's leaders said. It is unclear what will happen to the short-term development projects.
ConocoPhillips is one of the leading oil companies operating in Alaska. In 2019, it spent about $1.5 billion on capital projects in the state.
Across the company, ConocoPhillips has limited spending by $5 billion from previous expectations since the beginning of March and plans to reduce crude oil production by about 225,000 barrels per day in the remaining 48 states of the United States and Canada.
"We continue to monitor the market situation, for now, based on our current perspective, we chose to maintain the organization's capacity so that we can resume programs in the future," company spokesman John Roper said.
By Sol de Medianoche