Oil and Gas industry is Starting to cut back on investment and jobs
US production surges, Oil prices to stay low
Russia’s ruble plunged, The lower oil price has contributed to Russia’s recent currency collapse as its economy is heavily dependent on oil for revenue.
In Norway the krone slid with European equity-index futures as oil prices fell.
In Nigeria the government which is seriously reliant on oil for income restated its budget to take into account the new, lower oil price and has devalued its currency. The Economist, reckons that in 2015 Nigeria’s oil exports will bring in $67 billion, an 18% drop from last year, even though its output is rising.
Saudi Arabia, the world’s largest oil exporter is still in a strong position with an estimated $700bn reserve fund and could support global oil prices by cutting back its own production, but they have refused to so far. Its been reported that they feel that the continued drop in oil prices would put the US’s raoidly expanding shale oil and gas industry under pressure.
They could be right !! Either way the first quarter of 2015 will be tough for the industry.
The UK’s North Sea oil industry ‘close to collapse’ according to a BBC report.
ConocoPhillips is cutting 230 out of 1,650 jobs in the UK.
Oil services company, Schlumberger cut back its UK-based fleet of geological survey ships.
BP, Shell, Wood Group and Petrofac have cut contractor rates
Chevron has put a plan to drill for oil in the Beaufort Sea in Canada’s Arctic on indefinite hold, and Marathon Oil has cut its capital expenditure for next year by about 20 percent.
The Industry is surely having to restructure itself and the way it does business. Good news is No one country has the monopoly to fully control Oil prices anymore.
By Victor Cole, Oilandgaspress