OIL and gas firms could shelve projects worth around a trillion pounds following the plunge in the crude price, experts have warned. The Wood Mackenzie consultancy said $1.5 trillion (£0.97tn) of projects in planning around the world such as new field developments would be uneconomic at a Brent crude price of $50 per barrel (/bbl). “This spend is very much at risk," said James Webb, upstream research manager for Edinburgh-based Wood Mackenzie. Brent crude traded at around $48.20/bbl yesterday, compared with $115/bbl in June last year. The analysis will heighten alarm about the outlook for the UK North Sea, where firms have slashed spending and cut 5,500 jobs in response to the oil price fall. Wood Mack did not say how many North Sea projects were at risk. However, the consultancy warned recently that nearly half the oil and gas fields in the North Sea could be shut down over the next five years even if the oil price rises to $85/bbl. Wood Mack noted yesterday that cuts in spending on the scale it thinks possible would be seriously damaging to the oil services industry. While the service sector has the capacity to handle 40-50 new projects globally a year, Wood Mack expects just six new projects to go ahead in 2015 and around ten in 2016. Around 46 projects have already been deferred.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel