​Oil crash wipes out $31 billion from industry’s investment plans

Devon Energy headquarters in Oklahoma City. Image: Devon Energy

The global oil and gas industry has slashed at least $31 billion from investment budgets after crude’s epic price crash this month, and more cuts are likely to come.

Producers are quickly switching gears to survive a flood of oil coming into the market as Saudi Arabia and Russia open the spigots to fight for global market share. Meanwhile, the COVID-19 pandemic is having a devastating impact on demand.

Shale explorers in the U.S. and oilsands producers in Canada – which were already in dire straits before the price collapse – have been the quickest to announce belt-tightening efforts.

But giants like Saudi Arabian Oil Co., France’s Total SA and Russia’s Lukoil PJSC have also joined in, while Exxon Mobil Corporation and BP pl c have hinted that reductions in capital expenditures are likely to come. In Asia, Latin America and other Middle East countries, where most oil companies are state-run, it’s not yet so clear how producers will adapt to cope with the downturn.

© 2020 Bloomberg L.P.

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