Global oil & gas spending expected to decline by US$1 trillion by 2020
Commodities research firm Wood Mackenzie estimates that up to US$1 trillion in capital and exploratory spending will come out of the global energy sector between 2015 and 2020.
The US accounts for US$200 billion of those cuts. The company also estimates that production costs for shale have been reduced by 25% in 2015 with another 10% cut expected this year. Deepwater exploration is expected to be hit the hardest through 2016 and well into 2017.
The firm estimates Canada's oil & gas sector has cut US$25 to US$40 billion in spending to date since oil prices began falling in the fourth quarter of 2014. However, Canadian oil production is expected to keep rising as several major greenfield and expansion projects are completed next year.
Despite the dramatic cuts, oil production has yet to be affected. Wood Mackenzie estimates production won't be affected until the mid to late 2020s since many large projects take up to 5 years to come on-stream.