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Oilsands giant Canadian Natural Resources Ltd. is joining a lengthening list of oilpatch players who are cutting 2020 capital spending due to the COVID-19 pandemic and plunging oil prices.
After markets closed Wednesday, it said it will cut its capital budget this year to $2.96 billion, down from its previous plan to spend $4.05 billion, without changing its oil and gas production guidance.
In a more unusual move, the Calgary-based company said it will also cut the president's salary by 20 per cent, while other members of its management committee will see pay reduced by 15 per cent and vice-presidents take a 12-per-cent trim. Board members have agreed to cut their fees by 10 per cent.
"As part of the continued focus on effective and efficient operations, the company has reviewed its compensation program in light of the current commodity volatility," it said in a statement.
The news came as West Texas intermediate crude prices tumbled to their lowest level since at least 2003, falling US$6.50 or nearly 24 per cent to US$20.83 per barrel.
Global oil prices are being hit by fears that demand will fall due to the COVID-19 outbreak at the same time that the market is flooded with barrels of cheap oil after Russia and Saudi Arabia failed to set new production limits.
Also after the markets close, Calgary-based producer Baytex Energy Corp. announced a 50 per cent reduction in its 2020 capital budget to about $275 from the original range between $500 million and $575 million.
The cuts follow earlier news that Pembina Pipeline Corp. expects to spend between $1.2 billion and $1.4 billion on capital projects this year, down from the previously planned $2.3 billion.
"In these challenging times, Pembina's priorities include protecting the health and safety of our staff and communities, ensuring critical infrastructure continues to operate safely and reliably, and maintaining our strong financial position," said CEO Mick Dilger in a news release.
"We are confident we are taking the necessary steps to allow us to successfully achieve these objectives."
Pembina said it will defer planned expansions of its Peace Pipeline, Empress co-generation facility and its Prince Rupert terminal.
Canadian Natural cuts spending, salaries as more producers trim capital plans
It is also putting on hold its investment in an integrated propane dehydrogenation plant and polypropylene upgrading facility under construction near Edmonton that would produce plastics.
Meanwhile, Calgary-based Enerflex Ltd. announced it will cut its growth capital spending this year to about $90 million from $210 million, going ahead only with expenditures connected to existing contractual obligations.
"The uncertainty caused by the COVID-19 pandemic and recent market volatility has significantly changed our growth plans for the year," said CEO Marc Rossiter.
Enerflex also announced it would cut its quarterly dividend by 83 per cent to two cents per share to support its balance sheet.
The company, which makes natural gas compression, oil and gas processing, refrigeration and electric power generation equipment, has about 2,500 employees worldwide in operations in Canada, the United States, South America, Europe, the Middle East and Asia.
This report by The Canadian Press was first published March 18, 2020.
Companies in this story: (TSX:CNQ, TSX:PPL, TSX:EFX, TSX:BTE)