Investment from all but the largest oil companies in 2009 is seen falling by almost a third, due to weak cash flow and lack of access to capital, a survey from specialist energy investment bank Tristone Capital said Friday.

Firms that had capital expenditure of less than $10 billion in 2008 are cutting spending by 30% in 2009, the survey of 205 companies found. "Companies are struggling to make definitive business plans in this extremely uncertain and volatile environment," the report said.

The largest oil companies that spent more than $10 billion last year, are keeping spending relatively steady. "(They) have the financial flexibility to continue to spend on multiyear projects already under development and less flexibility to cut spending on committed projects," the report said.

Historically, the spending of the five largest international oil companies - BP PLC (BP), Chevron Corp. (CVX), ExxonMobil Corp. (XOM), Royal Dutch Shell PLC (RDSB.LN) and Total SA (TOT) - has been closely tied to the oil price, it said. Based on the current oil price, "historical relationships would suggest (capital expenditure) would fall 30-35%," the report said.

So both groups of companies may be forced to make further capital expenditure cuts this year or next if the price of oil doesn't increase.

"Many budgets were announced in late 2008 or early 2009 and commodity prices have weakened substantially since then, especially for natural gas," the report said. "If the commodity and capital markets remain weak, we expect additional cuts will be necessary due to the impact on cash flow and the lack of external financing available."

Total spending from all companies will be down around 17% in 2009, compared with 2008, with the bulk of the reduction in North America, it said.

The slowdown in the industry will most likely lead to reductions in operating costs that, "should have the favorable outcome of lowering break-even costs for marginal production, including oil sands," the report said.

It may also lead to a quick rebound in oil prices once the world economy begins to grow again. "With reduced spending, the upstream industry will be challenged to replace the annual production decline rates of 7-9%," the report said.

"We are already seeing evidence of declines in non-OPEC stalwarts Russia and Mexico, and the impact will become increasingly pronounced beyond 2010 when demand recovers and the market burns off OPEC spare capacity," it said.

Consultancy Cambridge Energy Research Associates said Thursday that the investment slowdown could cut nearly 8 million barrels a day from future supply.

Company Web site: www.tristonecapital.com

-By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317; james.herron@dowjones.com