(Reuters) - Top U.S. shale oil producer ConocoPhillips raised its capital budget for 2021 on its mega-deal with Concho Resources, while warning oil demand remains subdued as the world reels from the impact of COVID-19.
BP , Chevron and Exxon Mobil posted multi-billion-dollar annual losses on pandemic-related price declines and assets writedowns. ConocoPhillips lost $2.7 billion for the year including a $1.68 billion impairment charge, compared with a profit of $7.2 billion a year earlier.
While oil prices have recovered from a coronavirus-induced slump and Brent crude hovered around $58 per barrel on Tuesday, rising infections and new travel restrictions in some parts of the world have dampened demand.
“Demand recovery is taking longer, spare supply remains and inventories remain elevated,” Chief Executive Officer Ryan Lance said during an earnings call. “It makes no sense to grow into this market environment,” he said of plans to hold flat the merged company’s output.
Excluding impairments, the company posted a $1 billion loss for the year and a fourth quarter loss of 19 cents per share, smaller than analysts’ expectations of 28 cents for the quarter, according to Refinitiv IBES data. Its shares closed up a fraction at $40.97 on Tuesday. The stock is up 2.5% year to date.
ConocoPhillips set a $5.5 billion spending budget for 2021, much of which will be used to maintain current production. The higher spending reflects its purchase of shale oil rival Concho, a $13.3 billion shale acquisition that was struck as lower fuel prices and demand spurred consolidation.
CEO Lance said some of the Biden administration’s recent actions to combat global warming by targeting U.S. oil and gas production will hurt the economy and efforts to combat climate change.
If the drilling moratoriums become permanent, they will “negatively impact energy and national security and increase our reliance on higher GHG (greenhouse gas) foreign barrels,” Lance said.
Reporting by Arundhati Sarkar in Bengaluru; Editing by Vinay Dwivedi
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