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Continued: Oil is abundant and prices high, but steeper costs push Big Oil into a global slump

  • Article by: JONATHAN FAHEY , AP Energy Writer
  • Last update: August 1, 2013 - 6:05 PM

The company also announced it was abandoning plans to boost production to 4 million barrels per day by 2018 from its current rate of 3 million barrels per day.

Exxon Mobil, the world's biggest investor-owned company, said Thursday that profits tumbled 57 percent, to their lowest level in more than three years. Poor performance from the company's refining operations was largely to blame, but oil production fell 1.9 percent, the ninth straight quarter production has declined compared with the year earlier.

The last time Exxon's earnings fell below $7 billion in a quarter, oil prices averaged $79 per barrel. In this most recent quarter, they averaged $94.

BP reported a production decline of 1.5 percent on Tuesday and said production in the third quarter would also go down and costs would climb. Chevron, which reports results Friday, is expected to post a 17 drop in earnings per share, according to analysts polled by FactSet.

The oil majors have been investing heavily in major new projects, especially in the deep waters of the Gulf of Mexico, Brazil and East and West Africa. But the price tags are so high that the companies can't pursue everything they want.

The projects take years to begin producing. Exxon announced in May that it will spend $4 billion to develop a giant field called Julia in the Gulf of Mexico. The field was discovered in 2007, but it won't yield anything until 2016.

Chevron is spending $16 billion to develop three fields in the Gulf of Mexico that will begin production next year. Parts of those fields were first drilled as early as 2003.

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