Conoco Prepares for Renovation

Oil giant Conoco is preparing to cut as much as $10 billion from its capital expenditures, which amounts to a 12 percent cut to its 2010 capital expenditures, in order to draw investors back to purchasing Conoco’s lagging stock. So far this year, investors have not taken much faith in Conoco’s stock, forcing the company to take measures such as increasing its dividends in order to lure investors.

Conoco hopes that by restructuring, investors will flock to Conoco’s stock because of the possibility that Conoco’s renovations will result in financial success. However, the instability of the market, especially in light of recent data showing that energy prices may be on the way toward a significant tumble, has created a sense of doubt among potential investors.

Another problem for Conoco is its overexposure to North American markets, placing it in a situation where it succeeds and fails with the whims of a single economic region. As Conoco continues to take measures to decrease its spending and lure in potential investors, its competitors have largely increased spending and expanded operations, establishing a truly difficult landscape for Conoco as it prepares to renovate.

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