Energy producers sitting on $300 billion in projects waiting for price to rise
Oil companies have approved more big projects this year than the whole of last year – from BP’s expansion in the Gulf of Mexico to Eni’s deep-water liquefied natural gas facility off Mozambique.While the cost of offshore projects has come down it has not come down enough to tempt producers to get their feet set in the Gulf. I suspect the shale wells are offering a quicker return on investment.
But the industry’s long list of delayed projects continues to grow this year as drillers wait for higher oil prices, according to a new report by Norwegian consultancy Rystad Energy.
The number of major ventures that oil companies have postponed has grown to 105, up from 62 since the firm’s last report in January 2016. Those projects could tap into some 35 billion barrels of oil equivalent and absorb about $300 billion in development spending.