ConocoPhillips to spend less in 2015

ConocoPhillips said its 2015 capital budget would be 20 percent, or about $3 billion, lower than this year’s, the biggest spending cut by a US oil and gas producer in dollar terms as oil prices hit five-year lows.

ConocoPhillips said it would “defer significant investment” on less developed projects in the Montney and Duvernay fields in Canada, the Permian Basin in Texas and the Niobrara shale field, which extends over Colorado, Wyoming, Nebraska and Kansas.

ConocoPhillips, which is focusing on the Eagle Ford shale in Texas and North Dakota’s Bakken shale, said it would also spend less on major projects, many of which are nearing completion.

Global oil and gas projects worth more than $150 billion are likely to be put on hold next year, according to Norwegian consultancy Rystad Energy.

Despite lower investment, ConocoPhillips said it expected production from fields outside of Libya to rise 3 percent in 2015. In October, the company forecast 3-5 percent growth.

“This plan demonstrates our focus on cash-flow neutrality and a competitive dividend, while maintaining our financial strength,” Ryan Lance, ConocoPhillips chief executive said.

Several oil producers have set lower budgets for 2015, following a 42 percent drop in crude prices since June. Some companies plan to deploy fewer rigs next year and a couple of service companies have announced job cuts.

Tepid demand growth and forecasts that global oversupply would persist until next year because of OPEC’s refusal to reduce output are weighing on oil prices.