France’s Total cut its 2015 capital expenditure budget by 10 percent Wednesday and put two oil sands projects on a “long back burner” as it braces for a deeper oil price decline.
The cuts will bring Total’s 2015 capital spending budget down to about $23.4 billion from $26 billion last year and bring Total’s break even price to $40 per barrel.
The spending reductions will target North Sea, North American oil sands and U.S. shale projects, Reuters said.
Total has not named the two oil sands projects it plans to shelve.
“We have to react, but not overreact,” Total CEO Patrick Pouyanne told the Financial Times.
Total’s UK unit will trim contractor costs by 10 percent this year, a move that will most likely yield job cuts.
The company is also reportedly looking into a hiring freeze although Total has not commented on the matter.
Total will also speed up its planned $10 billion asset sale.
At a World Economic Forum panel session Wednesday Pouyanne said he expects oil prices to remain low during the first half of 2015.
“We have fields on the U.S. East Coast and my instructions have been pretty clear, we will limit investments. I can come back in one year when prices come back,” Pouyanne said.