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 2017 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 Says It Is Considering IPO of US Pipeline Assets (Jul 18)
 - Total, BP Unit, YPF Boost Investment in Argentina's Vaca Muerta (Jul 18)
 - Big Oil Sees Salvation in Gas, But What If It's a Wrong Bet? (Jul 18)
 Company: Exxon Mobil Corporationmore info


 - ExxonMobil Says Will Drop Discussions Over Indonesia's East Natuna (Jul 18)
 - Big Oil Sees Salvation in Gas, But What If It's a Wrong Bet? (Jul 18)
 - Mexico Delays Next Oil Auction to Let Huge New Find Sink In (Jul 17)
 Company: Statoilmore info


 - Canada's LNG Failure Is Its Own Fault, Seven Gen Founder Says (Jul 17)
 - Suriname Signs Offshore Oil Deals with Exxon, Hess and Statoil (Jul 14)
 - Statoil Drills Dry Wells Off Canada's Newfoundland (Jul 10)
 Company: Total S.A.more info
 - Total, BP Unit, YPF Boost Investment in Argentina's Vaca Muerta (Jul 18)
 - Big Oil Sees Salvation in Gas, But What If It's a Wrong Bet? (Jul 18)
 - S.Korea's Hanwha Total Says Naphtha Cracker Shut After Lightning Strike (Jul 17)
 Company: BG Groupmore info
 - Shell Mulls LNG-Hub Network as Use by Ships and Trucks Expands (Jul 11)
 - Tanzania Laws Would Allow Govt to Tear Up Mining, Energy Deals (Jun 29)
 - Despite Cuts, Big Oil to Expand Production into the 2020s (Sep 5)
 Company: ConocoPhillipsmore info


 - ConocoPhillips to Sell Barnett Assets for $305 Million (Jun 29)
 - ConocoPhillips To Lay Off 300 In Canada After Cenovus Deal (May 4)
 - ConocoPhillips Posts Surprise Loss On Higher-Than-Expected Costs (May 2)
 Company: Chevron Corporationmore info
 - Mexico Delays Next Oil Auction to Let Huge New Find Sink In (Jul 17)
 - White House Is Said to Be Unlikely to Restrict Venezuelan Crude (Jul 7)
 - Oil Producers' Cost-Cutting Swept Away by New Price Decline (Jun 30)
 Company: Hess Corporationmore info


 - Suriname Signs Offshore Oil Deals with Exxon, Hess and Statoil (Jul 14)
 - Hess To Sell Permian EOR Assets To Occidental For $600 Million (Jun 19)
 - Hess Reports Smaller Loss As Oil Prices Rise, Costs Fall (Apr 26)
 Company: Royal Dutch Shell plcmore info
 - Nigeria Oil Thieves Keep a Lid on Output Even as Bombs Abate (Jul 20)
 - Shell To Sell Stake In Corrib Gas Field In Ireland For $1.23B (Jul 12)
 - Shell Mulls LNG-Hub Network as Use by Ships and Trucks Expands (Jul 11)
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE



Most Popular Articles

From the Career Center
Jobs that may interest you
Operations Specialist - DJ Operations
Expertise: Operations Management
Location: Platteville, CO
 
Regional Sales Executive
Expertise: Business Development|Sales
Location: Jacksonville, FL
 
Operator Trainee 3
Expertise: Operations Management
Location: Belle Chasse, LA
 
search for more jobs

Brent Crude Oil : $49.7/BBL 1.76%
Light Crude Oil : $47.12/BBL 1.55%
Natural Gas : $3.07/MMBtu 0.58%
Updated in last 24 hours