An interesting report by Reuters on the impact of decreased oil prices on the New Seven Sisters.  As the article notes

“…The world’s biggest state-owned oil companies are weathering the global financial crisis and the dive in crude prices for now, top executives said on Friday, but they warned that $60 oil could soon begin to stymie their investment.

Oil majors and public energy firms that have ventured into higher-cost frontiers to grow their production are already beginning to pull back on projects as credit grows scarce and oil’s steep retreat in recent months threatens their profits.

But for now national oil firms — backed by political will and, in many cases, government coffers overflowing after a five-year oil boom — are holding the line, even though they say prices are nearing unprofitable levels.

“We’re not satisfied as a company with current oil prices,” Mohamed Meziane, chief of Algeria’s state oil firm Sonatrach, told reporters in Beijing, where he was attending a closed-door global forum for national oil company executives.

“We would like to have a higher oil price, at $80 to $100 a barrel, to satisfy all the concerned consumers and producers.”

But the risks are undoubtedly growing, and OPEC members want to avoid setting up another volatile spike in prices if projects once global growth resumes in several years’ time.

“I think if this trend continues, of course many projects are going to be scrapped and in two years we are going to be facing a real shortage in supplies and that will drive the prices as it did this year,” said Libya’s top oil official Shokri Ghanem.

His stance was echoed by the head of Norway’s StatoilHydro, Helge Lund, who said projects with cash committed would go ahead, but those in the planning pipeline could be at risk.

“The projects that are already sanctioned and in the investment phase, these projects will continue,” he said.

“How long the recession or the economic challenges last will I think decide to a large extent whether or not people are also delaying projects that are in planning today.”

SAUDI DELAYS

The national oil companies are still largely cushioned by their oil reserves and recent fat earnings from the worst impact of the credit crunch that is squeezing other energy firms.

“Most have enough cash flow to finance most of the projects themselves,” said Johannes Benigni, at Vienna-based JBC Energy.

In a more critical condition, however, are those who adapted too rapidly to the summer’s massive price spike and counted on further rich pickings to fund the national budget.

“In several cases, it appears that, rather than treating the spectacular oil revenues of recent months as a windfall, some governments have been quick to adopt them as the new norm and are now finding it extremely difficult to tolerate prices at $60-70 per barrel,” said Julian Lee at the Centre for Global Energy Studies.

Any difficulties are so far yet to show. The only state firm to put a project on ice is cashed-up Saudi Aramco, which said on Thursday it and partner ConocoPhillips had halted bidding on the construction of the 400,000 barrel-per-day, joint-venture Yanbu refinery in Saudi Arabia, citing uncertainties in the financial and contracting markets.

But others in the oil-rich Gulf are taking the opportunity to branch into new areas. The United Arab Emirates’ oil investment vehicle IPIC is near a deal to provide $1.1 billion in funding for a Papua New Guinea liquefied natural gas project.

But for most global companies it will be a period of painful adjustments as firms that plumped for expensive developments like deepwater drilling during crude’s apparently unstoppable rise are forced to reassess whether they can even break even.

“The marginal cost of expansion is probably today around $60,” the chief executive of Petroleo Brasiliero SA Jose Sergio Gabrielli told reporters in Beijing, but added that the high cost of bringing new projects on line now meant current market levels were unlikely to last long.

“If you have a very low cost in the short run, then you reduce investments and as such we have an upswing in price in the mid term,” he said.”