Global oil and gas exploration projects worth more than $150bn are likely to be put on hold next year as plunging oil prices render them uneconomic, Reuters has reported.
This could potentially curb supplies by the end of the decade. Next year final investment decisions will be made on 800 global oil and gas projects worth $500bn and totaling nearly 60bn barrels of oil equivalent, according to data from Norwegian consultancy Rystad Energy.
But with oil forecasted to average $82.50 a barrel next year, around one third of the spending, or a fifth of the volume of oil, is unlikely to be approved, head of analysis at Rystad Energy Per Magnus Nysveen said.
“At $70 a barrel, half of the overall volumes are at risk,” he said.
Global oil and gas companies are increasingly facing challenges such as depleting oil fields and costly production from more complex and hard to reach fields.
Likely to be axed next year are Chevron’s North Sea Rosebank project, Statoil’s $5.74bn work in Snorre field, Royal Dutch Shell’s unconventional projects in West Canada and BP’s deep water project in the Gulf of Mexico.
