Occidental Petroleum lost almost $1B and now faces coronavirus
Occidental Petroleum said it will reduce production and further reduce costs if oil prices continue to suffer amid the panic over the coronavirus epidemic.
“We don’t know how long this coronavirus will last,” Chief Executive Officer Vicki Hollub told analysts in a conference call Friday. “We are prepared to reduce our spending if the current environment does not improve.”
The Houston oil and gas producer on Friday said it plans to slash spending by $100 million this year after its $38 billion acquisition of The Woodlands-based Anadarko Petroleum that closed in August. The megadeal, which created the largest player in the Permian Basin of West Texas, represented a huge bet on oil prices rising amid the shale boom.
But prices plunged by 16 percent this week to their lowest level in more than a year, settling below $45 a barrel Friday afternoon amid fears that the coronavirus will slow the global economy and reduce demand for oil. Hollub said the company is preparing for scenarios in which oil prices are “lower for longer.”