Oil Price Crash Could Wipe Out $131 Billion In New Projects

25/03/2020 10:43 Energy Market

news

The double supply-demand shock in the oil market could lead to companies deferring as much as $131 billion worth of oil and gas projects slated for approval in 2020, with everyone in the industry--from Big Oil to the small players--is feeling the pain of the oil price crash and looks to weather the storm.

 

According to an impact analysis from Rystad Energy, oil and gas firms could reduce total project sanctioning this year to just $61 billion at Brent Crude average of around $30 per barrel in 2020. This spending forecast compares to previous estimates from Rystad that as much as $190 billion worth of investments would be sanctioned this year. Of the $61 billion investments expected to receive approval this year at $30 oil, half would be onshore and the other half offshore, according to Rystad Energy, which sees Brent at average $30 “an increasingly likely scenario.”

 

“Upstream players will have to take a close look at their cost levels and investment plans to counter the financial impact of lower prices and demand. Companies have already started reducing their annual capital spending for 2020,” Audun Martinsen, Rystad Energy’s Head of Energy Service Research, said in a statement.

 

From U.S. shale producers to Big Oil, everyone in the industry is bracing for pain at $30 oil, and companies are rushing to announce capital expenditure (CAPEX) cuts.

 

One of the major projects expected to receive final investment decision this year is ExxonMobil’s Greater Liza development offshore Guyana, which encompasses the Payara and Pacora discoveries, according to Rystad Energy.

 

But in North America, “multi-billion dollar oil projects, including LLOG-operated Shenandoah Phase 1 and the Shell-operated Whale development, could face short-term delays in the offshore sector due to low oil prices, while in the onshore sector operators are expected to wait for the situation to stabilize before committing to new projects,” Rystad Energy said. 

Source: oilprice.com

Prices fall in Greece's renewables tender with 503 MW awarded

07/04/2020 11:05:00

Greece has awarded 502.94 MW of wind and solar power capacity in its latest mixed renewables tender, with bids hitting as low as EUR 49.11 (USD 53.06) per MWh.

<READ MORE

Russia To Cut 1 Million Barrels Per Day, But Under One Condition

07/04/2020 11:01:00

Russia may be willing to reduce its oil production by as much as 1 million bpd, or a little under 10 percent of its March average but only if the United States joins the cuts, Bloomberg has reported citing sources it said were familiar with the dominant sentiment in the industry.

READ MORE

Renewables surge by 176GW in 2019

07/04/2020 10:52:00

The renewable energy sector added 176GW of generating capacity globally in 2019, slightly lower than the 179GW added in 2018, according to a new report.

READ MORE