Lortentzen & Stemoco (L&S) has cut its expectations for exploration-and-production (E&P) spending, which could signal a gloomier demand picture for offshore vessel owners.

The Norwegian shipbroker now expects oil companies to chop their spending by 19%, meaning they will shell out $400bn during the year.

L&S previously forecast a 14% drop in E&P spending this year.

“Most of the reductions are related to exploration, while oil companies are determined to retain projects that have been sanctioned,” the brokerage said in its monthly offshore market report.

L&S's