As Big Oil Shrinks, Boards Plot Different Paths Out Of Crisis

Reuters

LONDON/HOUSTON, Feb 7 (Reuters) - As oil and gas companies cut ever-deeper into the bone to weather their worst downturn in decades, boards have adopted contrasting strategies to lead them out of the crisis.

Crude prices have tumbled around 70 percent over the past 18 months to around $35 a barrel, leading to five of the world's top oil companies reporting sharp declines in profits in recent days.

Executives at energy firms face a tough balancing act: they must cut spending to stay financially afloat while preserving the production infrastructure and capacity that will allow them to compete and grow when the market recovers.

Companies have opted for differing approaches to secure future growth, often choosing to narrow focus to their areas of expertise and the geographic location of their main assets.

For example, American firms Chevron and ConocoPhillips are deemphasizing costly deepwater projects to focus on shale oil fields on their home turf. Hess Corp, meanwhile, is spending more this year offshore than onshore, a reversal from 2015 spending emphasized onshore.

Britain's BP is betting on offshore gas in Egypt, while Royal Dutch Shell has opted for an alternative route as it seeks to safeguard its future: the $50 billion takeover of BG Group.

In the five years before the downturn began in mid-2014, when crude prices held above $100 a barrel, big energy firms had raced to expand production capacity, including buying stakes in vast, costly fields sometimes located thousands of metres under the sea, and miles from land.


1234

View Full Article

Copyright 2016 Thomson Reuters. Click for Restrictions.

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies
 Company: BP plcmore info


 - BP Greenlights $9B Mad Dog Platform Design (Dec 1)
 - Australia Watchdog Says North West Shelf Gas Venture Underpaying Royalties (Nov 28)
 - BP Buys Interests in 2 North Sea Prospects (Nov 28)
 Company: Exxon Mobil Corporationmore info


 - More Company Climate Votes Ahead, As Trump May Loosen Energy Rules (Nov 25)
 - Kazakhstan's Giant Kashagan Oil Field Begins Commercial Output (Nov 21)
 - Minister: Nigeria Reaches Deal to Pay $5.1B in Unpaid Bills to Oil Majors (Nov 17)
 Company: Statoilmore info


 - Production Drilling Begins at Mariner Field in UK North Sea (Dec 2)
 - PSA Launches Investigation Into Scarabeo 5 Fire (Nov 24)
 - Statoil Acquires Petrobras' Operated Interest in BM-S-8 Offshore Brazil (Nov 23)
 Company: Total S.A.more info
 - Consortium Led By French Group Total Wins Ivory Coast LNG Deal (Nov 25)
 - Total, SOCAR Sign Absheron Development Agreement (Nov 22)
 - Kazakhstan's Giant Kashagan Oil Field Begins Commercial Output (Nov 21)
 Company: BG Groupmore info
 - Despite Cuts, Big Oil to Expand Production into the 2020s (Sep 5)
 - Sound Energy Appoints Ex-BG Exploration Lead (Aug 24)
 - Shell Misses Expectations As Earnings Plunge On Oil, BG Costs (Jul 28)
 Company: ConocoPhillipsmore info


 - U.S. Shale Firms Go Back To Work Buoyed By OPEC Deal, Trump Victory (Nov 14)
 - ConocoPhillips Aims To Sell Up To $8 Billion In Gas Assets (Nov 10)
 - Chevron Starts Production at Alder 40 Years After Discovery (Nov 7)
 Company: Chevron Corporationmore info
 - Chevron Temporarily Halts Production Unit At Australia LNG Plant (Nov 30)
 - Australia Watchdog Says North West Shelf Gas Venture Underpaying Royalties (Nov 28)
 - Minister: Nigeria Reaches Deal to Pay $5.1B in Unpaid Bills to Oil Majors (Nov 17)
 Company: Hess Corporationmore info


 - Oil Producer Hess Reports Smaller-Than-Expected Loss (Oct 26)
 - Oil, Gas Companies Evacuate GOM Staff Ahead of Tropical Depression (Aug 30)
 - Malaysia's Perisai Gets 6 Months Charter Extension for FPSO Perisai Kamelia (Aug 22)
 Company: Royal Dutch Shell plcmore info
 - Australia Watchdog Says North West Shelf Gas Venture Underpaying Royalties (Nov 28)
 - Sources: Shell Considering Selling its Iraq Oil Assets (Nov 28)
 - Kazakhstan's Giant Kashagan Oil Field Begins Commercial Output (Nov 21)
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE



Most Popular Articles

From the Career Center
Jobs that may interest you
US Houston: Division Finance & Accounting Manager
Expertise: Accounting|Financial Analyst
Location: Houston, TX
 
SharePoint Project Manager
Expertise: IT - Programming & Database|Project Management
Location: Houston, TX
 
Commercial Director - Terminals
Expertise: Business Development
Location: South Carolina, 
 
search for more jobs

Brent Crude Oil : $54.46/BBL 0.96%
Light Crude Oil : $51.68/BBL 1.21%
Natural Gas : $3.44/MMBtu 1.99%
Updated in last 24 hours