OIL AND gas company ConocoPhillips has slashed its investment plans for 2015 as oil prices continue to edge downward.
The company’s share price had dropped by four per cent by late last night to $65.03.
In a statement released yesterday the company announced a 2015 capital budget of $13.5bn (£8.6bn) – a 20 per cent decrease compared to the 2014 investment budget.
Global oil prices have plummeted by over 30 per cent since June. Brent crude oil – extracted from the North Sea – is currently priced at a five-year low of $67 per barrel, down from nearly $115 per barrel in June.
"We are setting our 2015 capital budget at a level that we believe is prudent given the current environment," said Ryan Lance, chairman and chief executive in yesterday’s statement.
The 2015 capital budget includes funding for base maintenance and corporate expenditures, development drilling programs, major projects, and exploration and appraisal spending.
The reduction in the capital budget primarily reflects lower spending on major projects. Some are nearing completion while the company has chosen to reduce its shale oil and gas exploration.
A significant slice of the spending cut also came from development drilling programmes. Only $5bn of investment was allocated to development drilling compared to $6.5bn last year.
However, the firm expects production growth of three per cent in 2015.