The worldwide financial liquidity crisis continues to affect future oil projects. Major companies say that projects with financing already in place are expected to continue as planned, but that those programmed for completion after 2012 are likely to be placed on hold until the global economic situation improves.

Outside of the major oil companies, most of which have healthy cash balances, there is more talk of cutbacks. Most national oil companies do not have the freedom to invest as their profits fund much of their governments’ budgets, a higher priority than funding future production. Even the Saudis have announced an indefinite delay in a $12 billion joint refinery project with Total.

Deepwater and Alberta sands projects which are very costly seem to be in the most trouble. Unfortunately, these are exactly the projects that are being counted on to supply an increasing share of world oil production in coming years.