ConocoPhillips Won’t Invest in Projects That Require $50 or Higher Oil Prices to Profit

first_imgConocoPhillips Won’t Invest in Projects That Require $50 or Higher Oil Prices to Profit FacebookTwitterLinkedInEmailPrint分享Financial Times:ConocoPhillips, the largest US exploration and production company, has ruled out investing in projects that need an oil price of $50 or higher to make a profit, as it attempts to raise shareholder returns after years of poor profitability.Ryan Lance, Conoco’s chief executive, said the company was seeking “returns over growth.”He is trying to maintain cost discipline, with managers seeking support for investment projects in spite of the rise in oil prices since June. US benchmark crude ended last week at about $56.70 a barrel.“You don’t even get through the door unless you are below $50 cost of supply, and you don’t really get to the table in the capital allocation fight unless you are $40 a barrel or below,” he said.He added that those were “fully loaded” costs, including components such as spending on acquiring drilling rights, investment in pipelines and other infrastructure, and corporate overheads, which are often excluded when US oil companies present figures for the economics of their wells.The majority of the capital spending for growth is going to “unconventionals” — shale and similar resources — especially in the Eagle Ford shale and the Permian Basin in Texas and New Mexico. Shale oil is attractive both because its costs are competitive, and because spending can be raised and lowered relatively quickly, Mr Lance said.More: Conoco sets $50-a-barrel oil price ceiling for new projectslast_img

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