## Revised estimates of project sanctioning total $61 billion in 2020, which is down from$192 billion forecast in 2019.
A combination of weaker oil and gas demand, and lower oil prices brought on by COVID-19 may lead exploration and production (E&P) companies to reduce project sanctioning by $131 billion, or 68% year-on-year, according to an analysis by Rystad Energy. The company’s pre-coronavirus forecast had total onshore and offshore projects representing about$190 billion of investments that would be sanctioned this year, which was below the 2019 estimate of $192 billion. If the price of Brent crude averages around$30/bbl in 2020, total project sanctioning estimates are down to $61 billion, with$30 billion of the overall expenditure tied to onshore projects and $31 billion to offshore. At a$40/bbl average, which Rystad says is getting more distant by the day, total sanctioning would still be down year-on-year at $82 billion, a 57% decline. Project sanctioning schedules are expected to face delays of several months, even for those with breakeven requirements of less than$40/bbl.