Oil & gas project sanctioning in 2020 set to fall by 75% despite activity in Norway, Russia – Saudi Gazette

Oil & gas project sanctioning in 2020 set to fall by 75% despite activity in Norway, Russia – Saudi Gazette

OSLO “” Global project sanctioning is set for a staggering decline this year of over 75% from 2019 levels, as the COVID-19 epidemic has caused E&P spending to drop much lower than what was expected at the beginning of the crisis.

Rystad Energy estimates total sanctioning value will end up at around $47 billion, an amount that would be even lower if not for recent developments in Norway and Russia.

Of total global sanctioning value in 2020, some $27 billion is expected to be for offshore projects, with the remaining $20 billion for onshore. In 2019, the total sanctioning value reached $197 billion, with $109 billion going to offshore projects and $88 billion to onshore projects.

So far this year, the projects that have been committed are worth a combined $29 billion, with $16 billion going to offshore and the remaining going to onshore. Rystad Energy's forecast is based on a scenario in which Brent averages around $40 per barrel this year, not far from its current market price.

"At the beginning of this year, the project commitments forecast for 2020 were expected to be comparable to 2019, but the industry downturn thanks to COVID-19 has caused commitments to fall sharply.

"Going forward, Rystad Energy