Wood Mac: Deep-Sea Oil Projects Make Up Most of $200B Deferrals
LONDON, July 27 (Reuters) – 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 capital expenditure budgets between 10-15 percent 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-$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 ultra-deep 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.
(Reporting by Karolin Schaps, editing by William Hardy)
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