(Corrects in paragraph 10 to say Shell, PetroChina areshareholders, not operators of Arrow LNG)
* Ernst and Young say more project delays likely
* Say at least 24 projects worth more than $1 bln put on ice
By Ron Bousso
LONDON, June 16 (Reuters) - Deepwater oil projects andcomplex gas facilities worth around $200 billion have beencancelled or put on hold worldwide in recent months due to thesharp drop in oil prices over the past year, consultancy Ernstand Young said on Tuesday.
Further project cuts and delays are likely as the industrybraces for an extended period of lower oil prices as a result ofa supply glut.
"The mind set in the industry at the moment is that pricesare unlikely to be bouncing up materially in the near term," theconsultancy's Andy Brogan said in a presentation. "There is anexpectation that volatility is with us for a reasonable periodof time to come and companies need to cope with that."
The delays in multi-billion dollar projects that can take upto 10 years to develop, and needed to support rising globaldemand for energy, could create a shortage in the future.
International companies have responded rapidly to the nearhalving of oil prices since last June, slashing tens of billionsof dollars in capital spending in order to boost their balancesheets and maintain dividend payouts to investors.
"A total of $200 billion of oil and gas projects have beendeferred or cancelled," said Brogan, global oil and gastransactions leader at Ernst and Young.
"Portfolios reviews are happening more frequently andprobably with more rigour," Brogan told the World National OilCompanies Congress. "There isn't anywhere for projects to hide."
The main 24 mega projects that have been put on ice orscrapped are spread across the globe, according to EY.
For oil, many of the projects are complex, deepwater fieldsin the Gulf of Mexico, the North Sea, West Africa and SoutheastAsia with budgets of up to $20 billion.
Among the most expensive are liquefied natural gasfacilities such as the Arrow liquefied natural gas (LNG) projectin Australia, a joint venture between Royal Dutch Shell and PetroChina and BG Group's Prince RupertLNG project in Canada.
Though often just as expensive, most oil mega-projectsbenefit from the advantage of returning value within 3 to 4years from first investment, compared with up to 12 years forLNG projects, Brogan said.
"We have seen IOCs (international oil companies) already gothrough one rigorous review of their portfolio. We are nowseeing them turning their attention to see how flexibility canbe embedded in their portfolios and businesses" (Editing by William Hardy)
BP (BP.)