ConocoPhillips to cut back on oil production as pandemic halts demand
ConocoPhillips announced Thursday it’s going to reduce oil production by 225,000 gross barrels of oil per day as the novel coronavirus pandemic halts oil demand.
“Today we are announcing further capital, operating cost and share repurchase reductions of $3 billion. We also announced our intention to defer production where we have a compelling economic reason to do so. These actions reflect our view that near-term oil prices will remain weak, largely due to demand impacts from COVID-19 and continued oil oversupply,” said Ryan Lance, chairman and chief executive officer on the company’s website. “We are well-positioned with flexibility to take actions that we believe maintain our relative competitive advantages, as well as our ability to resume programs depending on the timing and path of a recovery.”
Some of the actions taken Thursday directly reference Alaska.
According to the press release, “An additional reduction in 2020 operating plan capital expenditures of $1.6 billion, bringing the current estimate to $4.3 billion. These reductions are sourced from across our global portfolio, primarily focused on Lower 48, Alaska and Canada areas where we have the highest levels of flexibility.”
A spokesperson with ConocoPhillips didn't answer specifically how this would impact the North Slope but did release the following statement in regards to if people would be laid off.
"The actions we announced today did not include layoffs. We continue to monitor the market situation. But at this time, based on our current outlook, we chose to maintain organization capacity so we can resume programs in the future," wrote John Roper, ConocoPhillips' Director of Media Relations and Crisis Communication.
In addition, ConocoPhillips announced it will see a reduction in operating costs of approximately $0.6 billion, representing roughly 10 percent of the initial 2020 guidance.
Plus, the company also announced it will curtail production in Canada and the Lower 48 regions until market conditions improve.
“Importantly, I want to recognize our employees, contractors and other stakeholders for their continued support,” chairman Lance added. “The combination of COVID-19 and the oil market downturn has been difficult on industry and on stakeholders everywhere. As we manage through this unprecedented event, ConocoPhillips’ priorities are to protect the health and safety of our stakeholders, help mitigate the spread of COVID-19, and safely execute our business plans.”
On April 8, 2020,
to the COVID-19 threat.
The plan included:
- Safe holding and quarantine guidelines for ConocoPhillips North Slope workforce
- Anchorage based employees and contractors: All non-critical ConocoPhillips and contractor employees are directed to work from home
- Medical screening in Anchorage for travelers to the North Slope on ConocoPhillips aircraft
- Health screening in Deadhorse for travelers entering ConocoPhillips’ operations via road
That same day, the company announced it was
on the Alaska North Slope, though at that time the company said well production would continue as usual.