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March 10 (Reuters) - ConocoPhillips said on Wednesday it has resumed its share buyback program and pledged to keep spending flat even as oil prices climbed, the latest U.S. energy firm to embrace investor returns over production growth.
Despite the uptick in crude prices, oil companies are expected to largely limit spending to marginally higher as investors reward companies showing capital discipline after years of low returns from the sector.
Globally-traded Brent crude rose over $70 a barrel this week, its highest since January 2020, as the COVID-19 pandemic halted travel and slashed fuel demand.
"We believe this market will favor companies who demonstrate sustainable discipline and strong free cash flow generation with a track record of predictable returns of capital," ConocoPhillips Chief Executive Officer Ryan Lance said.
ConocoPhillips maintained its previously announced operating capital program of $5.5 billion, joining top U.S. oil majors Exxon Mobil and Chevron that have also outlined plans in the last two weeks to preserve shareholder returns and keep spending in check.
Exxon reaffirmed plans to keep annual project spending at or below $19 billion in 2021, while Chevron said it would fix annual capital outlays at around $14 billion through 2025.
ConocoPhillips, the top independent U.S. oil producer, said its $1.5 billion buyback program was 50% higher than the level of repurchases in the fourth quarter of 2020, when the program was suspended due to its deal to buy Concho Resources.
"It's still early in the new year, but commodity prices have strengthened such that our dividend alone may not be sufficient to meet our return of capital commitment," Lance said.
Based on ConocoPhillips' current outlook for 2021 commodity prices, the share repurchase along with its ordinary dividend reflects the company's plans to return greater than 30% of cash from operations to shareholders in a year, it said. (Reporting by Arathy S Nair in Bengaluru; Editing by Krishna Chandra Eluri)