ExxonMobil announced Tuesday it will slash its budget by 30 percent for oilfield projects as the petroleum industry reels from sharply lower demand due to the coronavirus.
The move, the latest cutback in spending by an oil giant, comes as US oil prices remain stuck in the mid-$20 per-barrel range, less than half their price a year ago as the sharp economic slowdown due to coronavirus thrashes oil demand.
ExxonMobil said the bulk of the 2020 cut -- to $23 billion from $33 billion -- would come in the Permian Basin, a shale-rich region in Texas and New Mexico that has attracted heavy investment in recent years.
The Permian has more short-term drilling and development projects than some other bigger oilfield ventures that are more difficult to ramp up if they are suspended.
The biggest US oil company by market capitalization said it planned to push ahead with a big investment to boost output at an offshore project in Guyana, but that it delayed a final investment decision on a giant liquefied natural gas project in Mozambique.
The company also signaled it will protect its dividend for the foreseeable future.
The measures aim to "preserve long-term value, maximize cost efficiency and put us in the strongest position when market conditions improve," said Chief Executive Darren Woods.
"While COVID-19 has had a significant impact on the global economy, we are confident that trade, transportation and manufacturing will recover."
Besides COVID-19, oil prices have been battered by an ongoing fight between Russia and Saudi Arabia that has flooded the market with oil. However an emergency OPEC-led summit on Thursday could stabilize the market and boost prices.
Shares of ExxonMobil rose 4.8 percent to $42.41 in mid-morning trading.