Global energy firm ExxonMobil has reduced its 2020 capital spending and operating expenses in response to the COVID-19 crisis.
The energy firm has reduced its capital spending by 30% and cash operating expenses by 15% to avoid running losses due to low commodity prices resulting from oversupply and demand weakness from the COVID-19 pandemic.
ExxonMobil’s capital investments will be $23 billion in 2020 from previously planned $33 billion. The decrease in capital investments is expected to help the energy firm to increase efficiencies and reduce costs.
Darren Woods, the CEO at ExxonMobil, said: “After a thorough evaluation of the impacts of the pandemic and market conditions, we have worked closely with business partners to plan and execute capital adjustments that preserve long-term value, maximize cost efficiency, and put us in the strongest position when market conditions improve.
“The long-term fundamentals that underpin the company’s business plans have not changed — population and energy demand will grow, and the economy will rebound. Our capital allocation priorities also remain unchanged. Our objective is to continue investing in industry-advantaged projects to create value, preserve cash for the dividend and make appropriate and prudent use of our balance sheet.”
A final investment decision for the Rovuma liquefied natural gas (LNG) project in Mozambique, expected later this year, has been delayed.
The company is maximizing production of products critical to the global response, including isopropyl alcohol, which is used to manufacture hand sanitizer, and polypropylene, which is used to make protective masks, gowns and wipes.
ExxonMobil is also supporting efforts to redesign and accelerate production of reusable face masks and shields to help alleviate the shortage for medical workers and first responders.