ConocoPhillips announced on Monday cutting its capital spending budget by 20 percent next year in response to the falling crude oil price.

The company will spend 13.5 billion U.S. dollars producing and looking for oil and gas in 2015, compared to 16.7 billion dollars this year, according to a press release issued by the third largest U.S. oil producer following ExxonMobil and Chevron.

Previously, ConocoPhillips indicated it would spend less than its previous goal of 16 billion dollars in capital expenses for 2015. But the new budget was even lower than some analysts were expecting.

"We are setting our 2015 capital budget at a level that we believe is prudent given the current environment," said Ryan Lance, chairman and chief executive officer of the Houston-based company. "This plan demonstrates our focus on cash flow neutrality and a competitive dividend, while maintaining our financial strength."

Despite the lower investment level, the company expects to achieve approximately 3 percent production growth in 2015 from continuing operations, excluding Libya, Lance said.

ConocoPhillips' decision came as oil companies began announcing spending cut following a steep slide in oil prices. On Monday, crude prices again plummeted as reports said that Iraq has cut its oil prices to Asia and the United States.

Light, sweet crude for January delivery moved down 2.79 dollars to settle at 63.05 dollars a barrel on the New York Mercantile Exchange, while Brent crude for January delivery lost 2.88 dollars to close at 66.19 dollars a barrel.

Ample supply, moderate demand, a stronger U.S. dollar, and uncertainties about global economic growth have been key factors in damping down oil prices, which have evaporated more than a third since June. Endi

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