Cost-cutting of about 40% on new oil-and-gas projects is “bringing some uneconomic fields over the threshold of viability”, according to UK consultancy Douglas-Westwood.
Many such projects have been hit by the downturn and Douglas-Westwood says it has set the average cuts at 40% after reviewing more than 250 upstream capital projects that have been sanctioned in the past four years.
As the energy downturn took hold of the market, the immediate pressure from clients was on service providers to cut their prices by 10% to 15%.
