$33 Billion
Shell
February 4, 2016 |
$17-19 Billion
BP
February 2, 2016 |
$6.4 Billion
ConocoPhillips
February 4, 2016 |
Cutting 50%
Anadarko
February 2, 2016 |
Shell is also reducing exploration capital as it finalizes its merger with BG, but it is doing so on a much smaller scale than its peers by cutting capital only 5% vs. 2015 spend of $29B. The bulk of Shell’s budget will focus on select projects with the BG portfolio adding significant growth to deepwater and integrated gas business lines, which account for almost a third of planned investment. As of Monday February 15th, Shell and BG completed their merger on schedule and became the world’s second largest integrated energy company, overtaking Chevron.
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BP went into 2015 with $20B capex guidance and ended up spending $18.7B, 6.5% less than scheduled. The British major is looking to continue disciplined spending and flat production levels—initial 2016 guidance calls for organic capital spending in the lower end of the $17-19B range first published in October 2015.With an ongoing reduction in operating cash costs and third-party spend, the company is basing its estimate on $60/bbl Brent and looking to achieve a cost base below that in order to free up cash flow. |
ConocoPhillips is making the most drastic capex cuts of this group, a 52% decrease in investment from its 2015 guidance this time last year of $13.5B. The company quickly cut that to $11.5B after Q1 and to $11B following Q2 (final spend for 2015 was $10.1B). Similarly, 2016’s current guidance of $6.4B is a $700MM adjustment from December when planned spend was $7.7B. The most telling statistic for 2016 exploration is the cut to three rigs in the Lower 48 for the company as it adjusts to a new $45/bbl breakeven price. |
During 2015, Anadarko spent $5.36 million, which is $250 million less than its initial guidance. Yet sales volumes of 294 MMboe surpassed the upper end of guidance by 8 MMboe. However, in 2016 APC is cutting back. Capex will be 50% less at $2.8 billion and production will be flat vs. 2015, with significant cuts in US onshore investment. Unlike Exxon, Anadarko is cutting it dividend by 81% to 27 cents per common share. The move will save APC about $450MM annually. |
