REUTERS
About $1.5 trillion of uncommitted spend on new conventional projects and North American unconventional oil is uneconomic at a $50 oil price, illustrating the need to reduce costs in the industry, according to analysts at Wood Mackenzie Ltd, Bloomberg reported.
The proposed projects, including spending on North American shale, are "now out of the money, or in starker terms, uneconomic at $50 oil," James Webb, upstream research manager at Wood Mackenzie, said in a statement on Monday.
"This spend is very much at risk," he said.
A drop of about 50% in crude prices over the past year has forced oil companies to cut spending and defer new projects.
In September, Goldman Sachs Group Inc. lowered its forecast of the average cost of Brent crude oil in 2015 to $53.7 per barrel from the May forecast of $58.2 per barrel. The forecast price for Brent oil for 2016 was worsened by experts from Goldman Sachs to $49.5 per barrel from $62 per barrel, according to the report.
At this, the analysts of Goldman Sachs Group Inc. consider that the excess supply on the world market can lead to a drop in oil prices in the medium term to $20 per barrel.