OPEC Revenue Plunges; Falls Below $1 Trillion Annually -- Not Seen Since 2010 -- June 17, 2015

Rigzone is reporting: mid-year survey suggest much improved E & P outlook in 2016.

Capital expenditures (CAPEX) for global exploration and production (E&P) spending are expected to fall by 20.2 percent this year to approximately $590 billion – the first time that spending has dipped below $600 billion since 2011 – but is poised to rise in 2016 if oil prices stabilize at or above the $65 to $70/bbl threshold, according to the majority of companies surveyed in Evercore ISI’s 2015 Mid-Year Global E&P Spending Outlook.

The spending outlook reflects a significant decline relative to the 5 percent decline from the firm’s initial January survey, and follows five consecutive years of gains and a 12 percent compound annual growth rate since 2009.

The decline in oil prices that began last year has prompted companies throughout the oil and gas industry not only to slash spending and operational plans, but to lay off thousands of workers as well. Oil prices fell after OPEC – the Organization of Petroleum Exporting Countries – made the decision not to cut output, trying to defend market share against U.S. shale production. At its recent meeting, OPEC members refused to cut the production ceiling.

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Which Leads Us To This --

Bloomberg over at Rigzone reports: OPEC revenue slumps below $1 trillion for the first time since 2010.

OPEC nations’ revenue from petroleum exports plunged below $1 trillion last year for the first time since 2010, highlighting how slumping crude prices hurt countries reliant on oil sales to fund their economies. The group’s 12 members earned $993.3 billion in 2014, a decrease of 11 percent from a year earlier.

Their combined current account balance slumped by 35 percent to $273.6 billion as the drop in exports was accompanied by an increase in imports.

The revenue drop shows the strain on the group’s members as they increase pumping at a time of oversupply, following a Saudi Arabia-led strategy of defending market share instead of prices. OPEC nations agreed on June 5 to keep a production limit of 30 million barrels a day, a level they have exceeded every month since June last year, according to data compiled by Bloomberg. 

Revenue will probably be below $1 trillion again in 2015 based on a very, very miserable first half.