Norway’s Statoil will not add any new U.S. rigs this year as the company looks to boost investments in longer term projects.
“I don’t see us adding rigs this year. You don’t need as many rigs if you can drill them quicker, better, faster and safely,” Statoil’s head of North American exploration William Maloney told Reuters.
The state owned company hopes that by focusing on long term investments it can become less vulnerable to market volatility.
“We as an industry tend to have a permanent bipolar disorder. We are either euphoric or depressed. Maybe this time it will be slightly different and this will allow us to look through the cycle,” Statoil chief economist Eirik Waerness told Reuters.
Statoil isn’t alone in its reluctance to bring new U.S. rigs online.
According to Baker Hughes the U.S. rig count has fallen for 19 consecutive weeks and slid below 955 for the first time since April 2009 last week.
Statoil is planning to trim spending by only 8 percent this year while other upstreams have slashed their spends by 20 percent or more since crude prices began falling last year.
Despite low oil prices the company green lit its $29 billion Johan Sverdrup project in February.
Production at the North Sea field is slated to start by 2019 with the field having a projected break even point of under $40 per barrel.
The field is expected to produce up to 3 billion barrels of oil equivalents over 50 years.
The company will also continue investing in the U.S. Gulf of Mexico where it made an oil discovery at its Miocene Yeti prospect earlier this month.