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Global oil demand returning – says ConocoPhillips executive

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(Reuters) – U.S. oil producer ConocoPhillips sees global demand returning to 100 million barrels per day and growing from there, a senior executive said on Thursday.

The view stands in contrast to rival BP Plc, which sees the coronavirus pandemic leaving a lasting effect on global energy demand, though ConocoPhillips still expects “quite a bit of uncertainty next year,” Senior Vice President Dominic Macklon said during a Q&A with Raymond James.

Capital spending in 2021 will be “somewhat below” its original planned 2020 level of $6.6 billion, Macklon said.

The hardest-hit area of the oil industry in 2020 has been U.S. shale, where producers cut production and sidelined equipment as oil prices crashed. While U.S. shale output was about 8.2 million bpd at the start of the year, that level will likely fall by 4 million bpd in 2022, Macklon said.

While ConocoPhillips left seven drilling rigs at work in shale fields, it cut all fracking crews earlier this year as oil prices crashed. It is returning two fracking crews to the field, Macklon said.

The company has not had layoffs in 2020 and remains committed to growing the dividend, Macklon said.

In July it agreed to buy land from Kelt Exploration Ltd in Canada’s Montney shale oil play, in a $375 million deal. The 140,000 acres in British Columbia are directly adjacent to ConocoPhillips’ own Montney lands.

When asked whether it would consider a purchase in an area where it doesn’t already operate, Macklon said yes, but the preference is for assets “we know and understand well.”

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