Chevron Corp slashed US$5 billion from its investment budget and shut down its share buyback program on Friday as the crude price plunge continued to savage budgets of oil industry powerhouses.
The news came after another US oil leader, ConocoPhillips Inc announced on Thursday its second sharp reduction in exploration spending in two months as oil prices showed no sign of rebounding.
Anglo-Dutch giant Royal Dutch Shell PLC unveiled plans to slash spending by more than US$15 billion over the next three years after posting lower annual profits on tumbling oil prices.
Chevron said it would spend US$35 billion on exploration and production projects, 13 percent less than last year, in response to the nearly 60 percent fall in oil prices since the middle of last year due to a global glut.
In addition, after spending US$5 billion on share repurchases last year — a program that shores up the company’s share price, benefiting stockholders — chief financial officer Patricia Yarrington said the program would be frozen this year.
“Given the change in market conditions, we are suspending our share repurchase program for 2015,” she announced as the company presented its fourth-quarter earnings.
The company turned in its poorest quarter, profits-wise, since 2009, “largely due to the sharp decline in crude oil prices,” chairman and chief executive John Watson said.
Revenues for the three months dropped 17.9 percent from a year earlier to US$42.1 billion, and net income sank 30 percent to US$3.5 billion.
The company produced the same amount of oil as it did a year ago — an average of 2.58 million barrels per day in the quarter — but the average sales price was US$66 per barrel, compared with US$90 a year ago.
Watson said earnings were helped by gains in refining operations.
“Improved downstream results and higher gains on asset sales related to our divestment program partially offset the effect of lower crude prices,” he said in a statement.
Chevron shares took a small hit from the news, falling 0.8 percent in afternoon trade to US$102.16.
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