CNNFN writes article about Oil crash delays projects worth nearly $400B:
by Jim Boulden @CNNMoney January 14, 2016: 8:00 AM ET
How low can oil prices go?
How low can oil prices go?
The crashing oil price is taking ever more casualties.
Oil’s slump to 13-year lows has led to savage cutbacks in investments
by energy companies. Industry consultancy Wood Mackenzie says 68 large
upstream oil and gas projects worth $380 billion have already been put
on hold.
The delays mean the equivalent of 27 billion barrels of commercially
viable oil and gas will be left in the ground for now.
“The impact of lower oil prices on company plans has been brutal,” said
Angus Rodger, an analyst at Wood Mackenzie.
The consultancy concludes that the cost of big projects has not
fallen enough to justify massive upfront investment. Oil has plunged by
about 70% from the June 2014 peak of almost $108.
Instead of concentrating on finding new sources of oil and gas, big
companies are now having to focus on how to “free up the capital just
to survive at low prices,” Wood Mackenzie said.
And it’s not just the low price, but the prospect that oil won’t
rebound for a long time that is killing projects, particularly costly
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