Oil-related projects worth $1.5 trillion unlikely to be built, Wood Mackenzie projects

Oil-related projects in North America worth roughly around $1.5 trillion are now considered uneconomic and are unlikely to be brought online, according to a report published Monday by consultant Wood Mackenzie. Oil producers are targeting cost cuts of roughly 20%-30% due to the biggest slump in oil prices since the 1980s, but they also have slashed investment programs and defer projects that remain too expensive at crude s current price level of around $50 a barrel. Spending is down by $220 billion for 2015 and 2016, compared with Wood Mackenzie’s pre-oil-price-crash projections, Kallanish Energy finds. Much of the drop in spending has been focused on projects onshore North America. Additional measures are needed to manage costs, said James Webb, Wood Mackenzie s Upstream research manager, warning that simply squeezing the service sector won t be sufficient to meet the industry s cost-reduction goals. The consultancy said most new oil projects remain uneconomic. Wood Mackenzie estim
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