Oil and gas projects in deep basins account for most of deferred investments worth more than $200 billion made due to the oil price crash, analysts at consultancy Wood Mackenzie said in a report.
Oil and gas majors have slashed capex budgets between 10% and 15% this year in response to oil prices halving over the past year.
A large chunk of these cost savings have been made by deferring investment decisions in expensive projects, shelving more than $200 billion worth of investments, the analysts said.
Estimates by rival consultancies have varied between $150 billion and $200 billion.
“By year-end we may be able to count the number of major upstream projects that made FID (final investment decision)during 2015 on one hand,” they said, identifying 45 major project deferrals across the globe.
As much as 10.6 billion barrels of oil equivalent in resources located in deep or ultradeep oil and gas projects are affected by the delays, showing projects in frontier areas are worst hit.
Canada's oil sands projects make the country most vulnerable to project deferrals, with 5.6 billion barrels of liquid reserves at risk in the country, Wood Mackenzie said.
Recommended Reading
Chesapeake Slashing Drilling Activity, Output Amid Low NatGas Prices
2024-02-20 - With natural gas markets still oversupplied and commodity prices low, gas producer Chesapeake Energy plans to start cutting rigs and frac crews in March.
Sunoco’s $7B Acquisition of NuStar Evades Further FTC Scrutiny
2024-04-09 - The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act for Sunoco’s pending acquisition of NuStar Energy has expired, bringing the deal one step closer to completion.
Moda Midstream II Receives Financial Commitment for Next Round of Development
2024-03-20 - Kingwood, Texas-based Moda Midstream II announced on March 20 that it received an equity commitment from EnCap Flatrock Midstream.
E&P Earnings Season Proves Up Stronger Efficiencies, Profits
2024-04-04 - The 2024 outlook for E&Ps largely surprises to the upside with conservative budgets and steady volumes.
Humble Midstream II, Quantum Capital Form Partnership for Infrastructure Projects
2024-01-30 - Humble Midstream II Partners and Quantum Capital Group’s partnership will promote a focus on energy transition infrastructure.