Energy Giants Abandon $200Bln Worth of Projects Due to Oil Prices Slump

The global decrease in oil prices that started in the summer of 2014 led to cancellation of a total of 46 large-scale oil and gas projects all over the world involving the equivalent of 20 billion barrels of oil, according to report.

MOSCOW (Sputnik) — The world’s largest oil and gas companies have shelved projects worth a total of $200 billion amid the decrease in global oil prices, the Financial Times reported, citing UK-based energy research and consultancy group Wood Mackenzie.

Analysts from Wood Mackenzie said the decrease in oil prices that started in the summer of 2014 has led to cancellation of a total of 46 large-scale oil and gas projects involving the equivalent of 20 billion barrels of oil.

The United Kingdom’s BP, the United States’ Chevron, Norway’s Statoil and Anglo-Dutch Royal Dutch Shell featured on list of companies that put off ambitious oil projects.

According to the researchers, more than half of the projects put on hold involved oil reserves that are located thousands of feet under the sea, making extraction extremely costly.

Wood Mackenzie named Canada as the region hardest hit by the postponed projects, where an initiative to explore of about 5.6 billion barrels of reserves, almost all oil sand, was cancelled.

In the second half of 2014 global oil prices decreased more than twofold, dropping from $100 to $45 per barrel of Brent. A November decision by OPEC states not to lower their oil extraction quota accentuated the trend. In 2015, Brent prices reached a peak of $69.58 per barrel early in May before decreasing once again to below $55 in July.