OSLO, March 23(Corrects MARCH 23 story to identify consultancy, paragraph)

OSLO, March 23 (Reuters) - Spending on new oil and gas projects could fall by more than two thirds this year if oil prices remain at the current levels, the Oslo-based Rystad Energy consultancy said on Monday.

Crude oil prices dropped more than 60% since the start of the year as demand fell due to travel and business restrictions to stem the spread of the coronavirus, while Russia and Saudi Arabia ended an agreement to curb production.


Investments are likely to fall to $61 billion or by 68% if the Brent crude price stays at around $30 a barrel, and to $82 billion, in case the price rises to $40 a barrel, compared with $192 billion spent in 2019.

North Sea oil was trading at $25.7 a barrel by 1533 GMT on Monday.

"Upstream players will have to take a close look at their cost levels and investment plans to counter the financial impact of lower prices and demand," said Audun Martinsen, head of Rystad's energy service research.

"Companies have already started reducing their annual capital spending for 2020," he added.

Anglo-Dutch major Shell and Norwegian independent oil firm Aker BP, 30% owned by BP, said on Monday they would cut capital spending by 20%.

French energy group Total said the company would seek to reduce total spending by more than $3 billion, including $2.5 billion to come from exploration and production.


Rystad said it still expected major projects, including ExxonMobil's Greater Liza development off Guyana, to be sanctioned this year.

The majority of the producing North Sea oil and gas fields could make money at $30 a barrel of oil thanks to improvements made since the last market downturn in 2014-16, but most yet to be approved projects were at risk, consultancy Wood Mackenzie said in a note on Monday.

"Most FIDs (final investment decisions) for 2020 are off the table. At current prices, nearly two-thirds of development spend could be wiped from our forecast over the next five years," Neivan Boroujerdi at the consultancy added. (Reporting by Nerijus Adomaitis, editing by Ed Osmond)