Pre-FID project deferral update: deepwater hit hardest Report

Insight 13 January 2016

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Report summary

22 major projects and seven billion boe of commercial reserves delayed – that's the damage of the last six months. The total tally of pre-FID projects we estimate have been deferred due to lower oil prices now stands at 68, containing 27 billion boe of reserves.This constitutes US$380 billion of total capex deferred, with US$170 billion at risk over the next five years. With the average Brent breakeven (NPV10) of delayed greenfield projects remaining above US$60/boe, the outlook is bleak for the majority to move into FID contention in 2016.

Executive summary
The industry six months on
A growing impact on future oil production
and US$380 billion in capital now at risk
Major projects, major operators
The role of cost deflation
Underwater at US$60/bbl
Breakevens by resource themes
- Breakevens by regions
2015 FIDs – what do they tell us?
2016 FIDs – what to look out for
Appendix

Tables and charts

This report includes 14 images and tables including:

Changes in total deferred reserves since June
Changes in deferred reserves (bn boe) by theme
Liquids production impacted by project FID delays

Deferred pre-FID capex 2016-20 (US$ billion, real)
Deferred capex by country (US$ billion, real)
Deferred projects by country and commercial reserves (million boe)
Net company exposure to delayed projects
Changes in capex/boe by project type
Changes in capex/boe by region
Delayed greenfield projects IRR economics at base and US$60 (real) Brent price decks
Resource theme cost curve: Breakeven price versus % commercial reserves of delayed projects
Appendix: The 68 deferred projects
Breakevens (NPV10) of projects, by theme
Breakevens (NPV10) of projects, by region