• 6 hours Shell Oil Trading Head Steps Down After 29 Years
  • 10 hours Higher Oil Prices Reduce North American Oil Bankruptcies
  • 12 hours Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 14 hours $1.6 Billion Canadian-US Hydropower Project Approved
  • 15 hours Venezuela Officially In Default
  • 17 hours Iran Prepares To Export LNG To Boost Trade Relations
  • 19 hours Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 1 day Saudi Oil Minister: Markets Will Not Rebalance By March
  • 1 day Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 1 day Rosneft Announces Completion Of World’s Longest Well
  • 2 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 2 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 2 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 2 days Santos Admits It Rejected $7.2B Takeover Bid
  • 2 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 2 days Africa’s Richest Woman Fired From Sonangol
  • 2 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 3 days Russian Hackers Target British Energy Industry
  • 3 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 3 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 3 days Lower Oil Prices Benefit European Refiners
  • 3 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 4 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 4 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 4 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 4 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 4 days OPEC To Recruit New Members To Fight Market Imbalance
  • 4 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 4 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 4 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 4 days GE Considers Selling Baker Hughes Assets
  • 5 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 5 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 5 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 5 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 5 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 7 days The Oil Rig Drilling 10 Miles Under The Sea
  • 7 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 8 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
  • 8 days Italy Looks To Phase Out Coal-Fired Electricity By 2025
Alt Text

The Kurdish Oil Gamble Has Backfired

Kurdistan’s failure to hold the…

Alt Text

Big Oil Plans Blockchain-Based Trading Platform

Big Oil’s biggest players have…

Saudi Exec Expects $1 Trillion Drop In Energy Investments

Saudi Exec Expects $1 Trillion Drop In Energy Investments

A high-ranking Saudi Aramco executive says the plunge in energy prices already has caused many in the industry to cut spending on oil and gas projects, and the trend probably will continue for a few years, perhaps reaching a cut of $1 trillion in investments.

“Challenges during down cycles are more complicated today than before,” Amin Nasser, a senior vice president for exploration and development at Saudi Aramco, told the Middle East Oil and Gas Show on March 9 in Manama, Bahrain.

“At this moment the global industry is poised to potentially cancel about $1 trillion in capital funding,” Nasser said.

Later Nasser told reporters on the sidelines of the conference that the $1 trillion amount included initiatives that might be delayed, not merely those that would be canceled altogether. “What we’ve heard from the industry is that there is $1 trillion of planned projects that will be dropped or deferred over the next couple of years because of what’s happening,” he said, without identifying his source. Related: OPEC Boasts About Pain In U.S. Shale

The price of oil has plunged since late June from around $115 per barrel to around $60 today because of an oversupply caused by increased US production of shale oil and weaker demand for oil, especially in China and Europe.

This has eaten into the profits of both big and small energy companies, leading them to cut costs in many ways, including employee layoffs. But the largest hits are being felt in capital expenditures in companies ranging from Exxon Mobil Corp. of the United States, Norway’s Statoil and Britain’s BP.

Even the wealthy Aramco is feeling the pinch. The Arab Petroleum Investment Corp. in Riyadh said in a December report that it expects Saudi investments to drop to $127 billion during 2015-2019 from its previous estimate of nearly $180 billion during 2014-2018. A month later, Aramco’s CEO, Khalid al-Falih, said the company would renegotiate some existing contracts and postpone some projects. Related: Everyone Is Guessing When It Comes To Oil Prices

For example, Aramco is working to renegotiate its contract with the Italian engineering company Saipem to reduce the $2 billion costs of building processing facilities at the Khurais oil field in east-central Saudi Arabia. It is expected to add 300,000 barrels of oil per day of production capacity at Khurais, which already produces 1.2 million barrels per day.

Platt’s quotes anonymous sources as saying there’s been no decision on the Khurais project, but that it could be extended in an effort to cut costs, or it could be canceled altogether.

And Reuters, also citing anonymous sources, reports that Aramco has delayed exploration for oil and gas in the Red Sea as well as plans to build a clean-fuels plant for $2 billion at its largest oil refinery at Ras Tanura on the Saudi east coast.

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News