Wood Mackenzie has released the latest cheerful report about the oil and gas industry, saying it has and will cut a total $1 trillion from its E&P budgets between 2015 and 2020. Most of this will be cut from production, some $740 billion, and the rest, $300 billion, will be taken out from exploration.

People have been saying it for some time now: the future crisis for oil will be disastrous reserve replacement, alongside the bigger problem (at least for me) of not enough workforce. And yet, there is hardly anything that can be done about it. Many of those cutting spending simply cannot afford to suddenly change course and start pouring money into new projects. Given the nature of the industry, where new discoveries are uncertain as to their production potential until a lot of (expensive) tests have been done, it’s understandable why E&Ps are not rushing to invest in new production.

The biggest chunks have been taken out of the budgets of U.S. producers, understandably enough: they’ve been growing production in a frenzy since the shale boom began and don’t have the cushions that, say, Middle Eastern operators have. The latter, by the way, are not cutting spending, not even Saudi Arabia, Bloomberg says. That’s despite the Vision 2030 hype and the loudly repeated ambition to move away from oil ASAP and become the new solar hub of the world.

The situation is problematic because demand will continue to grow, no matter how sluggishly. It will worsen if the growth is not sluggish, which is also a possibility. At the moment, a minority of shale producers are operating at break-even point and some, according to industry insiders, are even turning in a profit, at least from some of their fields. The ratio between loss, break-even and profit is probably similar in offshore and conventional onshore fields as well, otherwise E&Ps would have started investing more in new production and ramping up existing output.

That’s not enough to prop up the whole industry, however, even with behemoths like Exxon and Shell that will be around forever, whatever the price of oil. Being around is one thing but being profitable is another and Big Oil and its investors know it well. Their useful moves are few in a market which reacts immediately to every rig added to the active count in the shale patch.

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