With the price of oil trading in the high $40's, most oil companies are cutting back on exploration expenses. But oil giant ExxonMobil (NYSE: XOM) is actually looking to boost its spending.The company announced last week that it expects to see its capital spending rising over the next few years as it continues to search for new sources for oil.
Last year the company spent $26.1 billion, and it announced that it expects to see its capital spending falling somewhere between $25 and $30 billion annually over the next 5 years. For 2009, it is now predicting that it is going to be spending closer to $29 billion.
While ExxonMobil is looking at lifting its spending on oil and gas exploration, its competitors are actually to keep its costs steady, and in many cases actually cutting back on capital expenditures.
Earlier today, Chevron Corporation (NYSE: CVX) stated that it expects to spend about $2 billion in exploration costs in 2009, which is about in-line with what it spent in 2008. Not everyone is looking to maintain their spending levels. BP PLC (NYSE: BP) told analysts last week that it requires $60 oil to fund its capital expenditures and dividends, and ConocoPhillips (NYSE: COP) is looking to reduce its spending nearly 20% this year.
For companies that have the cash, boosting capital spending does make some sense at this time. With oil sharply off its highs from last year, oilfield service costs have backed off substantially from where they were this same time last year.
Shares of ExxonMobil are rising today with the rest of the overall market, picking up 2.7% in today's trading, to $66.36, up $1.79.
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