CAPEX

Brazil’s national oil company estimated a reduction of 22 to 38% in capital expenditures in E&P from its 2020–2024 strategic plan and expects to spend $6 billion through 2024 to decommission offshore platforms and wells and underwater gas pipelines.

ExxonMobil and Halliburton made additional cuts in spending and personnel.

Sandvik and SNC-Lavalin made similar announcements in late March and would take further action if necessary.

The list of companies that are slashing millions and sometimes billions from their annual spending programs is growing longer as the ripple effects of a price war and pandemic spread across the globe.

Lower oil prices and capital discipline are expected to result in a double-digit drop in shale and tight oil spending, while deepwater momentum is seen continuing. This comes as “massive investments” will be needed in the next decade to meet growing oil demand.

The US major will keep its overall budget flat for a third straight year, but the expectation of lower oil and gas prices long-term will result in tax impairment charges of $10 billion–$11 billion. More than half of those charges will come from its Appalachia Shale gas assets.

The first subsea multiphase boosting system was installed in 1994. Since then, it has grown into a technology with a global track record.

Sustainable cost reductions through innovation and standardization will have more of a positive effect on the offshore sector than cyclical oil-price increases, an OTC panel of industry participants agreed.

With their newly refined portfolios, operators are looking toward growth in the coming years but will remain cautious given ever-changing industry economics.

Offshore exploration will be slow to come back as companies have delayed billions in projects through 2020. Exploration projects also must complete for funds with brownfields developments like EOR that potentially provide a shorter time to show a return.