Repsol, Shell best-placed in low oil price environment, says Barclays

Madrid-listed Repsol and London-listed Royal Dutch Shell are the best positioned in the current environment, the bank said.

It also highlighted upside potential for UK producer BP which has the "biggest opportunity to address the cost base".

Barclays kept an 'overweight' rating on all three stocks.

Barclays has lowered its 2015 earnings estimates across the sector by an average 20% in response to the recent drop in oil, and forecasts a 7% fall in spending by companies.

"However, we believe the (large-cap oil) group is significantly better prepared going into this downturn than in 2008 and flexibility exists in a number of areas including gearing, capex and opex to help mitigate some of the impact of lower prices," said analysts Lydia Rainforth and Joshua Stone.

"It is these self-help measures along with the commitment to dividends that we expect to support sector valuations even during a challenging 2015."