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The world's big energy groups have shelved $200 billion of spending on new projects in an urgent round of cost-cutting aimed at protecting investors' dividends as the oil price slumps for a second time this year.
The sell-off in oil has been matched by a broader slump in copper, gold and other raw materials, pushing the Bloomberg commodities index to a six-year low over concerns of weaker Chinese growth and rising supplies across the board.
The plunge in crude prices since last summer has resulted in the deferral of 46 big oil and gas projects with 20 billion barrels of oil equivalent in reserves — more than Mexico's entire proven holdings — according to consultancy Wood Mackenzie.
Among companies postponing big production plans while they wait for costs to come down are UK-listed BP, Anglo-Dutch Royal Dutch Shell, US-based Chevron, Norway's Statoil, and Australia's Woodside Petroleum.
Research from Rystad Energy, a Norwegian consultancy, found in May that $118 billion of projects had been put on hold, but the Wood Mackenzie study shows the toll is now much greater.
The decline in Brent crude, which has more than halved in the past year, was triggered by OPEC's decision not to cut output in the face of a US supply glut and weaker than expected demand. After stabilizing in March, oil prices have faced renewed pressure, with Brent falling below $55 a barrel this month — a 20 per cent decline from a five-month high reached in early May.
More than half the reserves put on hold lie thousands of feet under the sea, including in the Gulf of Mexico and off west Africa, where the technical demands of extracting crude and earlier inflation have pushed up the cost of projects.
Deepwater drilling rigs cost hundreds of thousands of dollars a day to hire and these projects could yet proceed if contractors' costs fall far enough.
Canada is the biggest single region affected, with the development of some 5.6 billion barrels of reserves, almost all oil sands, having been deferred.
"The upstream industry is winding back its investment in big pre-final investment decision developments as fast as it can," Wood Mackenzie said in the report to be released on Monday. "This is partly because it is one of the quickest ways to free up capital in response to low oil prices."
It added that the number of major upstream projects expected to be fully approved during 2015 could probably be counted "on one hand".
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Shell, which stunned the energy industry with a £55 billion agreed offer for BG Group in April, will this week set out deeper cuts to its capital spending this year, revising downwards its most recent estimate of $33 billion expenditure.
France's Total is expected to reveal it has managed greater efficiency savings than expected just a few months ago, while it is thought BP is likely to spell out the impact of falling supplier costs on its overall spending.
The Europe-based integrated oil groups should reveal second-quarter earnings about 20 per cent below those for the first three months of 2015, with Brent having averaged $63 a barrel, more than 40 per cent below levels a year ago, said Neill Morton, an analyst at Investec. Lower trading profits and seasonal maintenance could offset the impact of improved refining margins.