Multiple major oil companies announced that they would dramatically cut spending in 2015 to cope with the lowest oil prices in nearly six years.
ConocoPhillips Co. and Occidental Petroleum Corp. both announced major cuts to exploration budgets in their quarterly earning reports Thursday, Reuters reported. They are the third and fourth largest oil companies in the United States.
{mosads}Conoco said it’d cut exploration spending by 15 percent to $11.5 billion for the year. That follows a 20 percent cut announced in December.
Occidental’s capital budget is now $5.8 billion for 2015, a 33 percent decrease.
“There’s a lot of debate right now about the duration of the current low oil prices,” Conoco CEO Ryan Lance told investors. “But we’re assuming that they will stay low for 2015, and we’re taking decisive actions accordingly.”
“We think it is imprudent to accelerate some of these opportunities in the current low product price environment,” said Stephen Chazen, Occidental’s chief.
The Conoco and Occidental announcements come at the end of a week of similar announcements from other companies, Reuters said.
Hess Corp. said it would institute similar cuts, and Royal Dutch Shell said its spending would decrease by $15 billion over the next three years.
An oil supply glut, caused in part by historic production levels from the United States, is combining with decreased demand in major economies to bring oil prices near $40 a barrel, down from $100 a barrel as recently as June.
In addition to slashing budgets, oil companies and idled drilling rigs and cut jobs.