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[COPENHAGEN] AP Moeller-Maersk A/S's oil unit cut US$1 billion off its annual budget for capital expenditure after petroleum prices plunged.
Maersk Oil plans long-term capex in the range of US$2 billion to US$4 billion a year compared with a previous range of US$3 billion to US$5 billion, according to an investor presentation in Copenhagen on Wednesday. The new forecast doesn't include funds to be spent on acquisitions, which the company says it's still pursuing.
Maersk Oil is following the rest of the industry in cutting jobs and lowering investments after crude prices dropped about 50 per cent over the past 12 months. The company says it has lowered unit costs by about 33 per cent over the past year and completed 600 job cuts by the end of June.
Maersk Oil will focus on acquisitions in 2015 and 2016, it said. In the "long term" exploration will be "critical" to replace reserves, it said.
"We believe this is an opportune time for inorganic moves," Jakob Thomasen, chief executive officer of the oil division, said at the presentation.
The company is still on track to meet a goal of lowering operating expenses by 20 per cent by the end of 2016 compared with 2014 levels.
The oil price will stay at about its current level in the "short term," and then rise, helped by Chinese demand and responses from Opec, Maersk said.