BP PLC have stopped buying their own stock as a way to preserve liquidity. The company has also hinted it will reduce its program substantially next year. More oil majors are expected to follow suit.
Other smaller producers such as Devon Energy Corp. have also put on hold their share-buyback programs. All major oil companies have made it clear that buying back stock is not a priority for them in the current environment.
ConocoPhillips on Monday said it would delay its announcement of its capital spending and share-buyback plans until January.
Exxon and Royal Dutch Shell have echoed this approach, saying their top priorities are to fund robust investment programs and increase dividends.
These revisions are the first sign that even financially strong international integrated energy companies are changing course in order to weather the economic crisis. Cuts in the buyback programs are also pushing analysts to reduce their earnings per share estimates for next year.
However, oil majors are expected to continue with their generous annual dividend increases and remain a favorite destination for "safe-haven" inflows, analysts say.
Author:
Ksenia Kochneva
