Energy companies feel the pain of Saudi Arabia's price war
'This is the financial crisis for oil — except the producers are not too big to fail'
From the shale fields of Texas to deepwater projects in the North Sea, the price war launched by Russia and Saudi Arabia sent shockwaves across the entire energy industry and triggered the biggest sell-off since the global financial crisis.
'This is the financial crisis for oil — except the producers are not too big to fail'
From the shale fields of Texas to deepwater projects in the North Sea, the price war launched by Russia and Saudi Arabia sent shockwaves across the entire energy industry and triggered the biggest sell-off since the global financial crisis.
It has left some companies searching for strategies to protect profits and keep paying dividends. Others are fighting for survival.
"The price collapse could be the trigger for a new phase of deep industry restructuring — one that rivals the changes seen in the late-1990s," said Tom Ellacott of the consultancy Wood Mackenzie. "Sustained prices below $40 a barrel would trigger a new wave of brutal cost-cutting. More highly-leveraged players will be forced to make the deepest cuts to stave off bankruptcy."
Nowhere is that more true than in the shale industry, which helped end US dependence on Middle Eastern oil.
See the whole article on the FT here: https://www.ft.com/content/50c289dc-621f-11ea-b3f3-fe4680ea68b5
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