CNBC's full interview with ExxonMobil CEO Darren Woods

Описание: ExxonMobil Chairman and CEO Darren Woods joins "Squawk Box" by phone to discuss the state of the energy market as supply and demand issues wreak havoc on oil prices.

Exxon is slashing its 2020 capital spending plan as depressed oil prices hammer the energy sector, but CEO Darren Woods said that the company’s dividend is safe for the time being.

“A lot of our shareholders are retail shareholders — people who depend on that dividend — so we’ve been pretty committed to maintaining that and if necessary in the short-term using the balance sheet to support it,” Woods said Tuesday on CNBC’s “Squawk Box.” “It’s a capital-intensive commodity business so we know we are going to go through cycles, and the way we have prepared ourselves to manage through those cycles is to maintain a strong balance sheet,” he added.

Shares of Exxon rose about 5% during on Tuesday, although the stock has shed more than 38% this year.

On Tuesday, the company said that it was reducing capital spending for 2020 by 30 % — from $33 billion to around $23 billion — and cutting operating expenses by about 15%. The largest share of the reduction will be in the Permian Basin, where it’s easier to adjust short-cycle investments, Woods said.

U.S. West Texas Intermediate crude has slid 56% this year as the coronavirus outbreak has sapped demand. At the beginning of the year, a barrel of WTI fetched more than $60. Today, it trades around $26.44, hammering the highly-leveraged energy sector as producers struggle to break even with lower prices.

“The fact that we’ve lost 23% of demand here in a very short order, that’s a huge transition for the industry to make. ... Capacity has to come offline and there will be economics that drive that, that force the producers to shut-in,” Woods said. “The market will address the shut in, and drive levels down, frankly, because there’s no demand for the product and so eventually you have to stop making it.”

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