Oil companies around the world are scrambling to cut costs after a 60-percent drop in oil prices in seven months.
The U.S. faces a huge retrenchment as South Africa-based Sasol mitigates against low oil prices. Sasol has delayed a $14-billion project in Louisiana to make diesel out of natural gas, according to CNBC and the NewYorkTimes.
London-based oil producer Soco International reduced its 2015 capital expenditure budget by more than 60 percent compared to 2014 and will focus on projects in Africa and Vietnam, Rigzone reports.
Soco’s board is reviewing the company’s asset portfolio in light of the current oil price environment, the company said in a statement.
Sasol has delayed its decision on whether to build the first U.S. gas-to-liquids plant, according to a Bloomberg report in Fuelfix. The South African company announced plans to mitigate against lower oil prices.
The U.S. facility, planned next to an $8-billion ethane cracker in Lake Charles, Louisiana, was estimated in 2013 to cost $14 billion, according to Bloomberg. The cracker will convert ethane into ethylene to make chemicals that go into antifreeze and water bottles. It was approved in October and the final decision on the U.S. gas-to-liquids plant was expected within two years.
The plan hasn’t been scrapped — just slowed down, Sasol said.
“Albeit at a much slower pace, we will continue to progress the U.S. GTL facility,” said CEO David Constable said in a statement Wednesday. “North America and our home base in southern Africa remain strategic investment destinations for Sasol.”
Producers are rethinking investment and expansion strategies after oil prices fell more than 50 percent over the last six months, Fuelfix reports.
Some programs haven’t survived the drop in oil prices, according to Fuelfix. Royal Dutch Shell Plc and Qatar Petroleum said last week they’ve ended plans for a $6.5-billion petrochemical plant in Qatar.
Shell abandoned plans in 2013 to build a $20-billion gas-to-liquids plant in Louisiana with capacity to produce 140,000 barrels a day of liquid fuels. The project was capital-intensive and high-risk, Deutsche Bank AG said at the time, according to Bloomberg.
Sasol started its first gas-to-liquid plant outside South Africa in Qatar in 2007. It built a similar facility in Nigeria with Nigerian National Petroleum Corp. and Chevron Corp. and is building one in Uzbekistan with Uzbekneftegaz and Petroliam Nasional Bhd of Malaysia.
The company also planned a feasibility study for a gas-to-liquids plant in Mozambique with with Eni SpA, according to Fuelfix.