[TOKYO] Investment by big Japanese firms in upstream oil and gas developments is set to fall by around 40 per cent to about 1.2 trillion yen (S$15 billion) in 2016/17 due to current low prices, a government Energy White Paper showed on Tuesday.
The upstream investments by 10 firms including Inpex Corp, JX Holdings, Mitsubishi Corp and Mitsui & Co had already slipped from 2.1 trillion yen in 2014/15 to 1.9 trillion yen in the year ended in March, the trade ministry said.
The other firms surveyed are Japan Petroleum Exploration (Japex), Cosmo Energy Holdings, Idemitsu Kosan, Itochu Corp, Marubeni Corp and Sumitomo Corp.
Globally, top oil companies have struggled to cope with a roughly 55 per cent decline in oil prices since their 2014 peak, triggering a wave of spending cuts on new wells and projects to conserve cash.
International Energy Agency (IEA) Executive Director Fatih Birol said last month that global upstream investment fell by 24 per cent in 2015 and is set to fall by 18 per cent in 2016.
This would be the first time that the upstream investment has fallen for a second straight year since the 1980s, he said.
Mr Birol said annual global upstream investment needs to be at about US$630 billion a year to compensate for declining output at existing fields and maintain current production levels.