Oil Slump Has Caused $200 Billion in Spending Delays: Wood Mackenzie

by Ship & Bunker News Team
Tuesday July 28, 2015

Wood Mackenzie says the slump in oil prices has caused over 45 energy projects worldwide to experience investment delays worth a cumulative $200 billion, according to reports.

Furthermore, while a "select few robust developments" could receive approval before the end of this year, other projects will require "more radical changes to make them attractive investments in a world of greater financial discipline and lower oil prices," the Edinburgh-based researcher stated in a new report.

Deep-water projects and the Alberta oil sands account for 50 percent and 30 percent of the delays respectively, and although deep-water projects are still widely regarded as crucial for strategic growth, Wood Mackenzie says  the short-term outlook "for new incremental investment in Canadian oil sands is bleak."

Excluded in the report's calculations is the North American shale industry, which has reportedly experienced $83 billion in investment delays.

Wood Mackenzie also cites technical and political issues as reason oil and natural gas producers have delayed investment in projects such as BP's Mad Dog Phase II in the Gulf of Mexico and Woodside's Browse floating liquefied natural gas project in Australia.

Weak oil prices have hit countries such as the U.S. and Russia especially hard, and the International Energy Agency earlier in July said it expects the slump to extend into 2016 as demand growth slows to 1.2 million barrels per day.

Ship & Bunker News Team
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