American oil giants Chevron and ExxonMobil cut spending aggressively in the July-September quarter as they grappled with a downtrend in the fuel demand due to the COVID-19 pandemic. The two companies also lay off a substantial portion of their workforce, in line with their sectoral peers. US oil prices have fallen 41% this year, although demand in the Northern Hemisphere recovered in late summer. However, some economies are still struggling with high COVID-19 cases, with some of them reimposing lockdown measures.
ExxonMobil registered a loss of $680 million in the quarter ended September, marking its third successive quarterly loss. Meanwhile, Chevron managed to record a profit of $201 million, but it was sharply down from $2.9 billion a year earlier. Chevron shares rose 1% to $69.50 on Friday, while Exxon shares fell 1% to $32.62. Chevron and Exxon have lost about 40% and 50% of their value this year, respectively.
Exxon started 2020 with an ambitious $33-billion spending plan. However, it was cut to $23 billion, and for next year, Exxon’s spending plan is expected to be between $16 billion and $19 billion. The once most valuable company in the US is also evaluating whether to divest more assets in North America.
Exxon’s output in the Permian Basin in the third quarter was up slightly from the previous quarter to approximately 401,000 boepd. Meanwhile, Chevron expects its Permian production to fall to around 550,000 boepd this quarter from 565,000 boepd in the last quarter.
