Shares in Australia's oil and gas players are being hammered as tumbling crude prices prompt investors to re-examine major resources projects.
OPEC oil ministers overnight decided to maintain their output target despite an oversupply and Brent North Sea Crude hitting a four and a half year low of $US72.74.
Analysts say the weakness will weigh on local producers in the short-term as revenues decline, but over the next decade energy demand is expected to be strong.
Santos shares have been hit the hardest as the company completes its GLNG project in Queensland.
Australia's biggest oil producer Woodside Petroleum is also under pressure ahead of a final investment decision on its Browse offshore floating LNG project next year.
Santos shares dropped 13 per cent to $10.10, while Woodside shed seven per cent to $35.75.
Origin Energy gave up seven per cent to $12.25 and PNG-focused Oil Search lost six per cent to $7.97.
State One Stockbroking industry analyst Peter Kopetz said investors would renew their focus on major projects as revenues declined.
"There's going to be short-term pain as the hefty cashflows that they had over the last few years are not going to be there any more so investors have to re-adjust," Mr Kopetz said.
He said the short-term pain would be offset by long-term gain.
"Energy demand over the next decade or so looks reasonable," Mr Kopetz said.
He said there was more risk attached to Santos' developments as the company still had one year left to complete its GLNG project, the world's first coal seam gas export facility.
Meanwhile, Woodside would have to keep a close eye on the Browse development as the company readjusts its price forecasts.
"They'll have a look at it," Mr Kopetz said.
It comes a day after Woodside and its partners committed $1.2 billion to extend the North West Shelf development.
Gas export prices are currently linked to the oil price, but any changes could put further pressure on producers.
Fat Prophets Resources analyst David Lennox said Australia's big producers would experience compressed margins and cost cutting as well as less exploration spending and slower development programs.
"We can expect to see the local energy industry go through a similar thing as the iron ore sector," he said.
Companies would also be forced to revalue their assets as prices fall, he said.
