Near-term upstream investment slashed by US$370 billion since oil price fall Report

Insight 10 May 2016

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Report summary

It is two years since the dramatic fall in oil prices, and the impact on upstream development investment has been enormous. Since Q4 2014, we have removed US$370 billion (30%) of capital expenditure across 2016 and 2017. Looking further out to 2020, the number is approaching double that. The deepest cuts are in Lower 48, where capital investment has halved in 2016-17, falling by US$125 billion since 2014. The Middle East has generally been less impacted - with no drop in Saudi Arabian investments in 2016/17.

Deepwater investment plunges by nearly 40%
Oil sands – high breakevens prompt spend reduction by a quarter
LNG – first signs of price impact
- Percentage capex reductions by theme from Q4 2014 dataset to Q2 2016 dataset
Russia and the Caspian region – rouble depreciation and mega-project delays
Middle East and North Africa proving more robust
Mature North Sea hit hard
- Percentage total capex changes by region from Q4 2014 dataset to Q2 2016 dataset
Cost deflation is the key to new investment
Production impact biggest in the US
- Drop in forecast US Lower 48 liquids and gas production by year since Q2 2014
- Drop off in Pre-FID conventional greenfield projects total production by year since Q4 2014*
Outlook

Tables and charts

This report includes 4 images and tables including:

Near-term upstream investment slashed by US$370 billion since oil price fall: Image 2
Near-term upstream investment slashed by US$370 billion since oil price fall: Image 3
Near-term upstream investment slashed by US$370 billion since oil price fall: Image 4
Near-term upstream investment slashed by US$370 billion since oil price fall: Image 5

What's included

This report contains:

16 5 Global capex data by region.xls

XLS 48.50 KB
Near-term upstream investment slashed by US$370 billion since oil price fall

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16 05 Near-term upstream investment slashed by US$370 billion since oil price fall.pdf

PDF 952.13 KB