Oil and Gas Industry May Cancel US$1 Trillion of Planned Projects

Financial Post reported that the fall in oil and gas prices worldwide may lead the industry to cancel about US$1 trillion of planned projects globally over the next couple years, according to Amin Nasser, a senior executive at Saudi Aramco.

As quoted in the market news:

Nasser said the US$1-trillion figure included projects that might merely be delayed, not just those that could be canceled outright. Since last June, the Brent oil price has collapsed from US$115 a barrel to around US$60 because of a supply glut fueled by a sharp rise in U.S. shale oil production, as well as weaker global demand. The decline has left some smaller oil producing countries reeling and forced a number of oil companies to slash investment budgets.

Amin Nasser, senior vice president of Saudi Aramco, commented:

Challenges during down cycles are more complicated today than before…At this moment the global industry is poised to potentially cancel about US$1-trillion in capital funding. What we’ve heard from the industry is that there is US$1-trillion of planned projects that will be dropped or deferred over the next couple of years because of what’s happening.

Click here to read the full Financial Post report.