Oil majors have put exceeding $100bn of investment in newly purchased projects on ice in response to the big step in oil price, new exploration by consultancy Rystad Energy spelled out today.
The study, commissioned by The Spending Times, shows that 26 projects over 13 countries have been delayed and axed since oil prices did start to tumble last year, including nine Canadian tar sands schemes.
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The revelation complies to warnings from analysts such as the H2o and Tracker Initiative that capital and then carbon intensive projects such as tar sands developments and deep caribbean sea drilling operations will struggle to make money if oil prices remain reasonable.
The price of oil crashed to $45 per barrel in January the particular high of $115 in June 2014 as a result of surging output of US shale oil and lower than expected need in Asia. The downward manner in prices was further quick by the decision of the Organization from the Petroleum Exporting Countries (Opec), led backlight by Saudi Arabia, to resist entails it to curb supplies in some bid to protect prices.
As a result, carriers such as Royal Dutch Shell, BP and Statoil have been forced to shelve some of their costlier projects.
The exploration shows that at least $118bn of share has been hit, which is likely to put off future production by as much as 1 . five million barrels per day. This in turn may lead to a substantial rebound in the price of gel, said Rystad.
The report complies to a series of studies that have warned investment funds intensive FOSSIL iPhone 5 case fuel projects will possibly become stranded assets if the changover to some low carbon economy leads to tigher environmental regulations and reduced regarding fossil fuels.
The findings are made after a report from the Institute meant for Energy Economics and Financial Researching (IEEFA) yesterday showed how fossil fuel company stock prices have folded in recent years, concluding that the industry right away faces a "grim outlook" as a final result of tightening environmental legislation and adding stranded asset risks.
Moreover, the past saw the University of Oxford confirm it will not invest in coal and then tar sands as part of its moral policy to fight climate variation.
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