THE WALL STREET JOURNAL
JANUARY 17, 2009
By RUSSELL GOLD
In a sign that global economic woes are hobbling even the once-mighty oil industry, ConocoPhillips on Friday said it would slash its capital budget and lay off 4% of its work force, or about 1,350 workers. The company also will take several one-time charges, totaling $34 billion, against fourth-quarter earnings.
The charges are an admission that many of the assets acquired by the company over the past few years were no longer worth as much as once thought. As noncash impairments, the charges won’t drain the company’s coffers but will increase debt ratios and could affect its financial strength.
The recession and global financial crisis are taking a toll on energy companies after several years of rising oil and natural-gas prices, and ConocoPhillips is the first of the world’s major publicly traded oil companies to respond with big cutbacks. Houston-based ConocoPhillips also had been the most aggressive of these global companies, making several large acquisitions in recent years and accumulating more debt than its peers.
The company set its 2009 capital budget at $12.5 billion, an 18.3% reduction from 2008. “We are positioning ourselves in the current business environment to live within our means in order to maintain financial strength,” said Chairman and Chief Executive James J. Mulva in a statement.
ConocoPhillips, with a market capitalization of about $74 billion, is the third-largest U.S. based oil company by market value after Exxon Mobil Corp. and Chevron Corp. The move raises questions about whether other global energy producers, such as Chevron and Royal Dutch Shell PLC, might take similar steps in coming weeks.
ConocoPhillips plans to take a $25.4 billion after-tax impairment, erasing all the goodwill assigned to its exploration and producing assets. The write-down relates to several transactions but because of its size largely is connected to its 2005 acquisition of North American natural-gas producer Burlington Resources Inc.
It is also taking a $7.3 billion noncash charge related to its stake in Russian producer OAO Lukoil. The value of Lukoil shares fell 67% in the final six months of 2008, leading ConocoPhillips to take a charge related to its 20% ownership stake.
The company also said it replaced about 25% to 30% of its production with new reserves in 2008, meaning that for every four barrels of oil it pumped out of the ground, it replaced only one barrel for future production. Much of the lower reserves are because the company could no longer count some North American reserves, following current Securities and Exchange Commission rules.
Write to Russell Gold at [email protected]
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
