Oil Firms

t,1 B$&J$grus{ru$ rug{ws Oil Firms Now Eavor F'rsega Exxon, BP and other energy companies are avoiding expensive engineering projects Bv Senax KuNr Auo Bneorry Olsolv ects that can bring oil or gas to market within a few years is that it allows big companies to avoid being locked in to multibillion investments over as much as a decade, said Ryan Lance, the chief execu- tive of ConocoPhillips, at the annual CERAWeek conference in Houston on Tuesday. "They're not just paying lip service to this," said Luke Parker, vice president of cor- porate ana.lysis at Wood Mack- enzie, a Scottish energy con- sulting firm. "They want to be in a position to future proof themselves against peak oil demand when it comes." The challenge ofthe strategy is that many of the big Western companies have yet to prove that they can consistently tum a profit in a time of lower prices, especially in U.S, shale flelds. Ilcreasing production may prove even more daur,rlrle be- cause the compani.es hate :.. spend bifion:'r.ur :o :eoiace -r-re barrels the5'pump every year. Last week, BP announced plans to drive down its break- ,.ABSOLUTELY, ffi@ffiffi Cost Control The world's biggest oil companies have scrambled to reduce the price they need to break even, as the world of $100 a barrel fades. The world's biggest oil compaaies are getting thrifty. Oil prices have made a modest comeback from the Iows hit a iittle over a year ago, but energy companies such as Exxon Mobil Corp. and BP PLC aren't pursuing the extravagant bets they made at $100 a barrel-like commissioning multibillion- dollar projects in Arctic wa- ters and Kazakhstan's Caspian Sea. These companies, including Royal Dutch Shell PLC and Chewon Corp., are putting their money into cheaper, quicker ventures in Texas shale country, the Middle East and Brazil and squeezing more from existing projects world- wide. En

r1.l ;a ;*a tua9- NO crOHOF TF ConocoPhillips Shell Total SA BPi '?0il price required to generate enough cash from operations to (0ver (aDex and dividends iAs of Wednesday's market close, ilncludes lvlacondo liabiliiies Source: Jefferies even oil price to between $35 and $40 a barrel by 2021, all while increasing production. It is a feat the Brinsh oi1 gr- ant sal's ir cal puJi off by niainra:mg stricr cash disci- pline. Cr:nn-a cioltn costs and :ocusng on projects that gen- erate sllong refurns even at crurent prices. BP recently abandoned ambitious plans to explore in the Great Australian <( Current prlce of Brent crude oili THE \ALL STREDT JOURNAL. Bight-a potentially huge source of new supply that still couldn't compete economically with other project opportuni- ties. Instead, it invested $2 billion for a 10% stake in oil fields ir the United Arab Emir- ates, which has some of the world's lowest oil-extraction costs. Going forward, the com- pany is focusing on "long-lived cash bricks" of low cost oil Exxon Mobil says U,S. drilling operations would be central to its future. Above, a file photo of an Ex $${ I $E ei $i t{$ qqJ q'$'#$ il*go* t"ntt".Y ln BryloHrL Texas' WwMffi& e price rice of de olli ,rds )URNAL.

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