Chevron Guts Budget as Job Cuts, Project Delays Follow Oil Slump
Source: Bloomberg
by Joe Carroll
8:37 AM EST January 30, 2015
(Bloomberg) -- Chevron Corp. slashed its drilling budget by the most in 12 years, suspended share buybacks and laid off workers as energy producers around the world curtail ambitions to cope with free-falling oil prices.
Chevron lowered its 2015 capital-spending target by 13 percent to $35 billion and halted stock repurchases that absorbed $5 billion in cash last year. The San Ramon, California-based company reported a 30 percent drop in earnings from the year-ago period.
Chevron’s reduction is the most by dollar amount among about $40 billion in spending cuts announced industry-wide since Nov. 1. Still, other producers have slashed on a bigger scale, with some cutting outlays by 50 percent or more. Chevron’s accountants are hamstrung by multi-billion dollar developments that are too close to completion to postpone.
“Chevron doesn’t have quite the flexibility of some other companies to cut spending in the near term because they are still finishing some mega-projects,” said Brian Youngberg, an analyst at Edward Jones & Co. in St. Louis. “Beyond 2015, their flexibility will improve.”
Read more: http://www.bloomberg.com/news/articles/2015-01-30/chevron-profits-fall-to-lowest-since-2009-as-oil-prices-collapse
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