The rapid decline in energy prices is expected to have a large impact on investment in oil and gas projects worldwide. Since June 2014, the price of Brent crude oil price has collapsed due to a supply glut fuelled by a rise in US shale oil production, as well as weaker global demand, particularly in China and Europe.
Speaking during the Middle East Oil and Gas Show in Manama, Bahrain, Amin Nasser, Senior Vice President for Upstream Operations at Saudi Aramco, told local press: "Challenges during down cycles are more complicated today than before. At this moment the global industry is poised to potentially cancel about US$1 trillion in capital funding." This figure includes delayed projects as well as those that could be cancelled outright.
"What we've heard from the industry is that there is US$1 trillion of planned projects that will be dropped or deferred over the next couple of years because of what's happening," Nasser continued.
According to local reports, Saudi Aramco has delayed its deepwater oil and gas exploration and drilling activities in the Red Sea and suspended plans to construct a US$2 billion clean fuels plant at its largest oil refinery in Ras Tanura.
Edited from various sources by Rosalie Starling
Sources: CNBC, Oil Price