* Barclays sees global E&P spending off 15 pct in 2009
* Drop had been seen at 12 pct in December
* North America spending to show steepest decline
(Adds details on regional spending expectations)
By Matt Daily
NEW YORK, June 22 Oil and gas producers will
cut spending more sharply than expected this year because of
the slump in North American natural gas prices, analysts at
Barclays Capital said on Monday.
Spending globally on exploration and production is expected
to shrink by 15 percent in 2009 from the previous year,
compared to the 12 percent drop the companies had expected in
December, Barclays' analysts James Crandell and James West said
in a report on their semi-annual survey of 402 energy
Energy companies have delayed or canceled many projects as
oil prices tumbled from their record highs reached in July
2008. That has erased about half the price in shares of
oilfield service providers such as Schlumberger Ltd (SLB.N) and
Halliburton Co (HAL.N).
U.S. spending is expected to drop 38 percent to $67.5
billion, far steeper than the 26 percent decline the industry
had expected in December, and the biggest drop since the 40
percent cut in 1986, the analysts said.
Spending in Canada would fall nearly 36 percent to $29.9
billion versus the 23 percent companies had forecast
U.S. natural gas prices have been soft and were trading
near $4.00 per million British thermal unit as an abundance of
the fuel in storage has kept prices far below last year's peak
But oil prices have rebounded from their early 2009 lows
below $33 a barrel, and were trading at $68.34 in New York
early on Monday.
Outside those two countries, spending will fall about 5.7
percent to $318.3 billion, a more modest drop than the 6
percent expected in December.
Russia is expected to see a 30 percent drop in spending,
with Lukoil (LKOH.MM) showing the steepest decline of 52
In the Middle East and Africa, spending on exploration and
production will shrink by 9 percent from last year as Saudi
Aramco and the Nigerian National Petroleum Corp cut their
Venezuela's PDVSA is expected to cut spending 36 percent in
2009, helping bring Latin American companies' budgets down 10
percent from the previous year.
European companies will spend 11 percent less.