Global upstream firms will cut about $1 trillion from capital spend budgets over the next five years.
According to a report published by Wood Mackenzie, global upstream capital spend budgets have been reduced by 22 percent, or about $740 billion, from 2015 out to 2020.
When cuts to conventional exploration investment are included, that number grows to just over $1 trillion.
The U.S. Lower 48 have seen the quickest and deepest cuts, with about $125 billion cut from capex budgets from 2016 to 2017, Wood Mackenzie said.
Another $200 billion is expected to be cut from Lower 48 capex budgets out to 2020.
Russia will see capex investment fall by 40 percent over the next two years, although a large part of that decline is tied to the depreciation of the rouble, the report said.
The North Sea, home to several maturing fields, has seen capex investment fall by about 36 percent, or $27.5 billion, in the UK and Norwegian sectors since late 2014.
Wood Mackenzie expects at least 140 UK North Sea fields to cease production over the next five years and projects that $78 billion will be spent on decommissioning in the UK Continental Shelf.
Wood Mackenzie said total conventional exploration investment for 2015 to 2020 is now $300 billion less than the firm expected in 2014.
The Middle East has seen fewer spending cuts as countries in the region fight to maintain market share.
However, fiscal balances in those countries “are deteriorating” due to low oil prices, according to the report.
Saudi Arabia, the largest OPEC producer, posted a $97.8 billion budget deficit in 2015 and currently expects to run an $87 billion deficit in 2016.
Wood Mackenzie said that cost deflation has also played a “major role” in lowering capex spends.
Despite declining spends, Wood Mackenzie’s vice President of exploration research Dr. Andrew Latham said that the pace of cost cuts were not as quick as the firm had anticipated.
“Although exploration investment has more than halved since 2014, and the figure is expected to be around US $42 billion per annum for 2016 and the same in 2017, costs have not been cut as much and as quickly as we expected,” Latham said.