CALGARY—Oil and gas producer Canadian Natural Resources Ltd. says it’s reducing its 2015 capital spending plan by $2.4 billion—or nearly 30 per cent—as a result of low oil prices, which have dropped dramatically since CNRL’s original plan was announced in November.
Canadian Natural says it will defer about $470 million of spending for the Kirby oilsands project and reduce drilling at its North American and international conventional oil and gas operations.
But CNRL says the budget for its Horizon oilsands project has been left intact and the company expects the reducing capital spending will allow it to continue its dividend without changes.
The Calgary-based oil and gas producer also expects to continue to grow output compared with 2014 but at a slower pace—seven per cent, rather than the original target of 11 per cent.
Canadian Natural is the latest major Canadian energy producer to scale back its spending plans as a result of a dramatic decline in crude oil prices, which have fallen below US$50 a barrel from a recent peak of US$107.
A major reason for the collapse in global oil prices is an oversupply of crude, as growth in China and other Asian countries slows and production from the United States, Canada and other countries increases.
The OPEC cartel of petroleum producing countries has also said it won’t reduce output—a move that’s seen as a way to pressure other countries to reduce their higher-cost output