According to an impact analysis from Rystad Energy, E&P companies are likely to reduce project sanctioning by up to US$131 billion, or about 68% y/y.
Oil prices could fall into the low US$20s for the global market to rebalance, as Rystad Energy expects an increase in global supplies in the next three months.
The move, beginning from April, is in response to the oil price war between Saudi Arabia and Russia.
The price war will heavily impact service company revenues, even driving some out of the market, according to Rystad Energy.
A Rystad Energy impact analysis shows that US drilled but uncompleted wells will be the first assets to be threatened by the newly formed low price environment, as their breakeven costs are now only dollars away from market prices.
Brent crude oil prices, which Rystad Energy earlier expected to average nearly US$60/bbl in 2020, are now forecast to slump to about US$56/bbl for the year following revisions to Rystad's January forecasts.
Through December 2019, the Texas Petro Index lost 9.4% of its value since the February 2019 cyclical peak.
Estimated net production from Serica’s interests in Bruce, Keith, Rhum (“BKR”) and Erskine, in the UK North Sea, was 30 000 boe/d during 2019, around 13% higher than the production from the same assets in 2018 on a like-for-like basis.
Compared with recent years, both crude oil prices traded within relatively narrow price ranges throughout the year.