There has been blood in California

For producers, the Golden State has lost its lustre. Drilling is collapsing and output sliding

EVEN in a time of industry-wide cutbacks, California Resources Corporation, a spin off of Oxy Petroleum and one of the state’s largest oil producers, has taken austerity to the extreme. In the face of low prices and high debt, the company has stopped new drilling altogether. Its capital spending cuts have probably been the deepest in the industry, falling from $2bn in 2014 to just $90m this year. Production is falling steeply, with natural decline rates of around 10% a year taking hold. But the austerity-on-steroids approach is keeping the company afloat. California Resources is an extreme case, but a similar retrenchment is underway across California – the third-largest oil-producing state