[ISTANBUL] Global oil investments this year are on track to drop by 20 per cent, marking their biggest decline in history, Fatih Birol, head of the International Energy Agency, said on Friday.
A halving in oil prices in the past year has hit energy companies' revenue and is discouraging them from spending on both exploration and production. "We expect this year, in 2015, global oil investments to be 20 per cent less than 2014," Birol told a news conference at a G20 Energy Ministers' meeting in Istanbul.
"This is the biggest decline in oil history."
With oil at below US$50 per barrel, this has hit investment plans at major oil firms, national oil companies and independents which have had to find ways to conserve cash.
Cutting investment now will delay upgrades at existing fields as well as frontier exploration, meaning output could slow for years to come.
Some analysts predict a recovery for oil and gas where prices drop and stay low for years before rising. Research firm Morningstar told clients last week it anticipates oil markets fully rebalancing in 2017 at the earliest.