Where was CAPEX Cut the Most?

In one of our recent articles, we reported that oil and gas companies have reduced planned spending through 2020 by a whopping $1 trillion USD. (See also http://www.cnbc.com/2016/06/15/global-oil-industrys-retrenchment-tops-a-staggering-1-trillion.html).   This number is staggering and is made up of project cancellations and delays, internal cost cutting, and workforce reduction. In addition, in our earnings summary from big oil, we discussed flat CAPEX budgets for next year as currently projected by most major oil companies.

But who got hurt the most? Wood Mackenize (www.woodmac.com), reported this week, for example, that North Sea CAPEX has been cut by a whopping $55 Billion USD.   They also created the map below which shows where the money has disappeared from so far:

Ty’s Take. Interestingly, we can see that the U.S. has been hit the hardest but this makes some sense. What I question is, once CAPEX starts flowing again, and it will, where will the investment be? I believe that because U.S. shale production has been able to both cut costs of drilling and extend the production life through decreased decline rates (i.e. more production per well), CAPEX investment in the United States makes a lot of sense for big oil.