Anadarko Petroleum today joined the long list of independent explorers and producers that are cutting capital spending to adapt to lower oil and gas prices in the global recession. However, its cuts are small in comparison to its peers.
Anadarko says it will spend $4 billion to $4.5 billion–down from its 2008 budget of $4.5 billion to $4.7 billion. Late last year as crude and natural gas prices plummeted from summer highs, independents threw out announcements of spending cuts in almost staccato fashion, ranging from 17 percent at XTO Energy to 23 percent at Plains Exploration & Production and 38 percent at Chesapeake Energy. Some went higher. Last week Devon Energy, the largest of the independents, announced it would cut spending this year by more than half.
Anadarko CEO Jim Hackett called Anadarko’s spending plan “prudent” because it will continue exploration as well as fund massive projects while the company rides out the recession.
“Although 2009 will be a challenging year for our industry, we feel a prudent level of funding is appropriate given the economic quality of our current portfolio,” Hackett said in a statement.
However, he indicated the budget is somewhat fluid as economic conditions may change.
“We view our capital allocation decisions as an ongoing process, thus we will continue to closely monitor economic conditions and manage our spending to enhance shareholder value, while maintaining a strong balance sheet,” Hackett said.