Oil and Gas

UPDATE 2-Global oil and gas E&P spending seen down 15 pct

* 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)

NEW YORK, June 22 (Reuters) - 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 companies.

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 previously.

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 near $13.70.

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 percent.

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 budgets.

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.