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ConocoPhillips expects to start bringing back in July part of the oil production it had curtailed in the second quarter in response to the low oil prices, the U.S. oil company said on Tuesday.
In April, when oil prices slumped to the low teens amid crashing demand in the pandemic and the Saudi pledge to flood the market with oil, ConocoPhillips reduced its 2020 capital expenditure for the second time in one month and announced curtailments of some oil production in Canada and the U.S. until market conditions improve.
ConocoPhillips said it would voluntarily curtail 200,000 barrels of oil equivalent per day (boe/d) net until market conditions improve. The company curtailed production at Surmont in Canada due to low Western Canada Select (WCS) prices, as well as production across its operations in the U.S. shale patch.
As prices improved from the April lows, with WTI Crude closing in on the $40 a barrel mark, ConocoPhillips said today that it “continues to monitor netback pricing and evaluate curtailments across its operated assets on a month-by-month basis.”
The oil producer expects to begin restoring curtailed production in Alaska in July. In the U.S. shale patch, ConocoPhillips “expects to begin bringing some curtailed volumes back on line during July and will continue to make economically driven production decisions at the asset level in the months ahead.”
At Surmont in Canada, the company also plans to increase production in the third quarter from curtailed levels.
“Given ongoing variability and uncertainty in the outlook for production curtailments, the company will continue to suspend forward-looking guidance and sensitivities,” ConocoPhillips warned, as it joined other U.S. producers in bringing back some of the curtailed oil production volumes.
Early in June, EOG Resources and Parsley Energy said they would be bringing back online some production as prices started to recover.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com