A total of 68 major upstream projects totaling $380 billion in capital expenditure have been deferred since the oil price plunge of 2014, according to researchers at Wood Mackenzie. Deepwater projects have been hit the hardest, as companies shy away from the high upfront capital costs associated with greenfield investment. Twenty-nine deepwater projects have been delayed, up from 17 when Wood Mackenzie conducted a similar study last June.
The production affected by the deferrals is estimated to reach 1.5 million barrels per day by 2021 and 2.9 million bpd by 2025. In many cases, final investment decisions on the affected projects will be made no earlier than 2017.
Earlier this week West Texas Intermediate crude dropped below $30 per barrel for the first time since December 2003. The current strengthening of the U.S. dollar could send oil prices even lower.
MORE UPSTREAM NEWS: BP to cut 4,000 E&P jobs as oil nears $30
