Brookshire
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Complimentary Issue
Brookshire Special Report
Oil and Gas Outlook
Volume II, Number 1, October 9, 2009
Energy Investment a Casualty of the Recession?
This three-page Brookshire Special Report examines worldwide capital expenditures of the oil industry as well as crude pricing, cash flow, industry leverage, and impacts on future crude supply.
Global Capital Expenditures Pared in 2009 among Oil Producers
The adverse impact of the global recession has taken its toll on capital expenditure spending among energy industry participants. It is the industry's reaction to the worst global recession since World War II and one of the deepest slumps in crude prices. Brookshire's review of over 1,900 industry companies in Asia, Europe, North America, and South America reveals that they, irrespective of geography or size, have indeed pared back investment spending. Brookshire's sample includes large, mid, small, and micro cap energy sector producers and participants on almost every continent. Supermajors, independents, midstream and pipeline companies, the oilfield service sector, and refiners have all curtailed capital spending in 2009 to a mere 4.7% increase compared to 2008 spending levels. The impact of a retrenchment in investment spending today implies that once economic growth returns to some semblance of normalcy, there could be new supply-related pricing pressures looming in coming years. Brookshire anticipates upwards pressure on crude oil prices returning over the medium term.
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