OREANDA-NEWS. Fitch Ratings expects the earnings of European oil majors to fall further in 2016 on weaker oil and falling refining margins. However, the worsened macro-environment should be partially offset by the majors' cost-cutting efforts and cost deflation in the industry. We expect unit costs in the upstream sector to decline by around one-third by 2017 compared with 2014.

In its latest dashboard on the sector, Fitch says the normalised EBITDA of European oil majors decreased 40% yoy on average in 2015 as Brent collapsed 47%. This compares well with that of more upstream-focused players, such as ConocoPhillips, as integrated majors' earnings were largely supported by a robust downstream and less volatile midstream performance.

The dashboard also looks into the key initiatives announced by oil majors to address low oil prices. Those include opex and capex cuts, as well as continued disposals. It also summarises the majors' dividend policies.