News

January 05, 2009

Oil Price Slide Forces Middle East Producers To Reassess Project Costs And Timings

It is not only independent oil companies feeling the pinch as banks and other financiers tighten their belts in the face of some rather gloomy economic conditions. The sharp downturn in the global economy and the fall in world oil prices has eaten away at asset valuations and undermined development spending across the board.

While smaller oil companies have been scrambling for funds in recent months to keep their businesses afloat, larger cash-rich enterprises with plenty of established production are now being forced to re-evaluate the timing of their future projects. This is even evident in the Middle East, the world’s most important oil region, where national oil companies (NOCs) are set to rein in their spending in the coming years.

For niche players, the slide in oil prices since last summer may have had a...