New analysis has found that global oil and gas project sanctioning is due to fall by 75% in 2020 compared to last year, Kallanish Energy reports.
Figures published by Rystad Energy last Friday show that sanctioning of global oil and gas projects is expected to total approximately $47 million. This represents a 75% year-on-year decrease on project sanctioning recorded in 2019.
The primary factor behind the drop according to Rystad is the global Covid-19 pandemic, which has significantly slowed project investments in 2020.
To date this year, committed projects are valued at a combined $29 billion, with offshore projects accounting for 55% ($16 billion) and 45% ($13 billion) going towards onshore projects.
In comparison, total sanctioning value reached $197 billion in 2019, with $109 billion going to offshore projects and $88 billion to onshore projects.
“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,” said Karan Satwani, energy service analyst at Rystad Energy.
“Going forward, Rystad Energy estimates that sanctioning will not pick up again and recover to 2019 levels anytime soon.”
Rystad states that the global total for 2020 would be considerably lower without recent projects sanctioned in Russia and Norway. These include investments in the Kamennomysskoye-More project and Semakovskoye field development by Russian major Gazprom and Equinor’s Breidablikk development in Norway.
This post appeared first on Kallanish Energy News.