Low energy prices are seen as the main culprits. The current natural gas price in North America is about half of last year's average of $US4.20 while crude is selling for $US19.68 a barrel in New York, down 24% from last year's average of $US25.97.

Apache Corp has plans to cut spending by 70% after spending one billion dollars last year. Burlington Resources Inc said it has cut spending by 19% while Kerr-McGee Corp announced spending on drilling would be half of last year's budget. BP also announced it would shelve a $US600 million drilling program in Alaska and lay off 20% of its Alaskan workforce.

The largest independent oil and natural gas producer in the US, Anadarko Petroleum, plans spending cuts of a billion dollars for 2002 after announcing a big fall in fourth quarter profits, which fell to about $US25c a share, from $US1.88 a year earlier.