Covid-19: ConocoPhillips to cut spending by additional $1.6bn

American energy company ConocoPhillips has decided to further trim its planned capital expenditures this year by an additional $1.6bn due to the downturn caused by the Covid-19 pandemic.

This is in addition to the previously announced reduction of $700m.

The move brings the revised 2020 operating plan capital expenditures down to $4.3bn.

ConocoPhillips trimmed its operating costs of the year by $600m, nearly 10% of the initial 2020 guidance. This revises the estimate to $5.3bn.

Overall, the steps are expected to reduce annual expenses by $5bn over the original operating plan guidance.

ConocoPhillips chairman and CEO Ryan Lance said: “We entered this downturn with several competitive advantages, including a very strong balance sheet with over $14bn of liquidity, a diverse portfolio with low capital intensity, and significant financial and operating flexibility.

“We believe this puts us in an advantaged position to take rational, economic actions, including voluntary curtailments that align with reasoned views of the market.

“With today’s actions we have exercised a total of over $5bn of flexibility compared to our 2020 plan, while retaining additional flexibility, if needed.”

The company has also planned to reduce production by 225,000 gross barrels of oil per day.

This will be achieved by restricting production in Canada and the Lower 48 regions until the market recovers.

ConocoPhillips has also suspended the share repurchase programme.

Globally, more than 2.1 million people are infected by the Covid-19 disease. As of 17 April, the pandemic has killed around 146,000 people.