* Listed companies slashed production by 2.4 pct in Q3
* Declines follow sharp spending cuts in face of downturn
* OPEC struggles to hammer out deal on output cut
* GRAPHIC: tmsnrt.rs/2g3yCP5
By Ron Bousso
LONDON, Nov 24 The world's listed oil companies
have slashed oil output by 2.4 percent so far this year during
one of the industry's worst downturns as OPEC battles to agree
on its first production cut since 2008.
The aggregated production of 109 listed companies that
produce more than a third of the world's oil fell in the third
quarter of 2016 by 838,000 barrels per day from a year earlier
to 33.88 million bpd, data provided by Morgan Stanley showed.
By comparison, the Organization of the Petroleum Exporting
Countries produced 33.64 million bpd in October. OPEC has
struggled to agree on a joint production freeze or cut to
support oil prices before its Nov. 30 meeting in
In the second quarter of 2016, the companies reduced
production by nearly 930,000 bpd, according to Morgan Stanley.
The firms include national oil champions of China, Russia
and Brazil, international producers such as Exxon Mobil
and Royal Dutch Shell, as well as U.S. shale oil
producers like EOG Resources and Occidental Petroleum
The drop in oil companies' output is particularly compelling
given the increase in 2015, when third-quarter production rose
by some 1.9 million bpd.
"Clearly, we have seen a large swing in the year-on-year
trend in production, from strong growth as recent as a year ago,
now to steep decline. This is the outcome of the strong cutbacks
in investment," Morgan Stanley equity analyst Martijn Rats said.
Capital expenditure for the companies combined more than
halved from $136 billion in the third quarter of 2014 to $58
billion in the same period this year, according to Rats.
Oil executives and the International Energy Agency have
warned that a sharp drop in global investment in oil and gas
would result in a supply shortage by the end of the
Large oilfields, such as deepwater developments off the
coasts of the United States, Brazil, Africa and Southeast Asia,
typically take three to five years and billions in investment to
Cost reductions and increased efficiencies have only partly
offset the drop in production as a result of the lower
investment. Technological advancements have also helped boost
onshore U.S shale production.
"These declines should temporarily soften in 2017 as new
fields are coming on-stream in Canada, Brazil, the former Soviet
Union and U.S. tight oil probably stabilises," Rats said.
"Still, unless investment rebounds relatively soon, this
steep downward trend is likely to resume in 2018 and beyond."
(Reporting by Ron Bousso; Editing by Dale Hudson)