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Chevron cuts 2015 expansion budget by 13%

Chevron cuts 2015 expansion budget by 13%

Oil giant Chevron said Friday it would reduce expansion spending by 13% this year as fourth-quarter and yearly earnings declined on lower crude prices. Chevron plans to spend $35 billion on capital and exploratory investments in 2015 — 13% less than it did last year. The fast-and-furious drop in oil prices, which have fallen close to 60% since the summer, are cinching oil companies’ wallets across the board, which is likely to lead to industry layoffs in the coming year.101868389-chevron.530x298

Royal Dutch Shell said Thursday it plans to shave $15 billion in costs over the next three years, including a reduction in exploration and share buybacks, amid growing uncertainty over the impact of lower oil prices. ConocoPhillips reduced its 2015 spending plans by 15%. Shares of Chevron dropped 1.8% Friday to $101.17 a share.

The San Ramon, Calif., company reported earnings Friday of $3.5 billion, or $1.85 a share for the three-month period ended in December. That’s above analysts’ expectations for net income of $1.63 a share, according to analysts surveyed by Thomson Reuters, but it’s below last year’s fourth-quarter earnings of $2.57 a share.

For the full year, Chevron reported earnings of $19.2 billion, or $10.14 per share, compared with $21.4 billion, or $11.09 per share, in 2013. “Our 2014 earnings were down from the previous year, largely due to the sharp decline in crude oil prices,” Chairman and CEO John Watson said.