Is it time to take large oil and gas projects off the

In the past four weeks, four good-sized projects have been given final investment decisions.

Two came from : a third train for the Tangguh LNG plant in Indonesia, and the development of the Atoll gasfield off the coast of Egypt. Another was ’s $1.9bn development of the Greater Enfield oilfields in western Australia, and the largest by far was the -led $36.8bn expansion of the .

The oil price crash has meant that the number of large projects being given the green light has plummeted. Over 2007-13, there were on average 40 large projects — defined as having reserves of 50m barrels of oil equivalent or more — approved each year, according to Wood Mackenzie.

In 2015, there were just eight.

So far this year there have been six: the recent four, plus ’s investment , also offshore in Egyptian waters, and ’s plan to develop the prosaically-named KG DWN 98/2 off the east coast of India.

Angus Rodger at Wood Mac has been looking at the projects that have been approved, and come to some interesting conclusions about what it takes for the big beasts to survive in this harsh environment.

The projects that are making progress generally share characteristics that make their economics more appealing.

One is that they were typically based on existing facilities, rather than greenfield sites. Sometimes they use all the same infrastructure, sometimes they are a “step out” from an earlier investment. That has two benefits: the spending on new infrastructure is lower, and the useful life of existing facilities can be extended by running additional production through them.

The projects that have been approved also usually have one company in sole ownership or in a clear leading role. That means there is less “partner drag” as different parties in a consortium try to agree on a decision.

The favoured developments also often have strong local demand, so they are not necessarily dependent on the vicissitudes of world markets. Egypt and Indonesia, for example, both have rapidly growing energy demand.

The decision to go ahead with a project can also be helped by falling costs for services and equipment such as drilling rigs.

However, another recent piece of Wood Mac research suggested the decline in costs has been much sharper in US shale than in the rest of the industry.

There will still be some large investments, even in deep water, that are financially viable. Break-evens vary widely from project to project.

Even so, when companies are deciding where to deploy their precious — and dwindling — investment dollars, US shale in general .

That may not be true forever. Cuts in investment reduce future supply, and if oil demand keeps on growing then prices could one day go much higher.

A project that brings new oil on to the market in the 2020s when prices are above $100 per barrel could end up looking like a masterstroke.

But inside oil companies, it is tough to make that case. There will probably still be only about ten large projects that are approved this year, Mr Rodger expects.

“Even if the project looks sound based on expectations of future oil prices, the overwhelming focus on cost-cutting means it is very hard to get everyone to agree this is the right time to spend $10bn,” he says.

“And that reluctance to be countercyclical is one reason you’re not going to see a rush back to big projects.”