Paper: Maersk CEO Says Low Oil Price May Lead to Closures
COPENHAGEN, Dec 23 (Reuters) - A. P. Moller-Maersk's Maersk Oil unit would have to close some sites and cut operating costs if the oil price remains at its current level, the group's CEO said in an interview in Danish daily Politiken on Tuesday.
Nils Smedegaard Andersen said that if the oil price stays around $60 per barrel it would reduce revenue in the oil unit by a third from the level of 2013. The current oil slump has almost halved prices since June.
"As all costs, except taxes, are fixed it is obviously something we have to take very seriously. And we would have to do some things," Andersen said.
He said he would focus on reducing operational costs and exploration costs, and mainly explore for new oil in areas where production costs would be low.
If the oil price stays at current levels some of Maersk Oil's existing production sites would also have to be shut down earlier than otherwise forecasted, Smedegaard said.
He said, however, that he believed it would be more realistic that the oil price would stabilise at a level between $70 and $80 per barrel.
This view is shared by Arab OPEC producers, who expect global oil prices to rebound to that level by the end of next year as a global economic recovery revives demand.
Maersk Oil has a target to produce 400,000 barrels per day in 2020, up from 238,000 bpd in the third quarter this year.
"I think it is very important to say to the market and the organisation that we have these ambitions, but also that if they are not reasonable any longer we would have to adjust to the world situation," Smedegaard said in Politiken.
He said in November that Maersk's investment in Angola's Chissonga oil field is under consideration as a result of falling oil prices.
(Reporting by Teis Jensen, editing by Louise Heavens)
WHAT DO YOU THINK?
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.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- Two Main Forces Have Come Together to Pull Down Commodity Prices
- UK Offshore Energy Calls for Labour Party Meet
- Aker BP's 1.07 Bboe North Sea Projects Get Parliament Nod
- Coal Getting Cheaper in China Despite Heat-Induced Demand Surge
- Mitsubishi Shipbuilding Eyes to Fuel Sea Transport with Ammonia
- Distillate Crack Spreads Return to February 2022 Levels: EIA
- Americas Exploration Heats Up
- Gas South Inks Plumbing Deal for Its Consumers
- Saudi Oil Cut Risks Leaving Bitter Taste for Budget
- Irving Oil Starts Review That Puts Key Refinery on Market
- Saudis Remind Global Oil Market Who is King
- Saudi to Cut Output by 1MM BPD in Solo OPEC+ Move
- Data Science is the Future of Oil and Gas
- Debt Ceiling Deal Becomes Law
- What Do Latest OPEC+ Moves Mean?
- TotalEnergies Inks Agua Marinha PSC in Brazil
- Fatality At North Rankin Complex
- North America Loses More Rigs
- Par Pacific Completes Buy of ExxonMobil Refinery
- Regulator Fines Hilcorp Alaska in Latest of Over 60 Enforcement Actions
- Which Generation Is Most in Demand in Oil, Gas Right Now?
- Who Is the Most Prolific Private Oil and Gas Producer in the USA?
- USA EIA Slashes 2023 and 2024 Brent Oil Price Forecasts
- BMI Reveals Latest Brent Oil Price Forecasts
- Is There a Danger That Oil and Gas Runs out of Financing?
- BMI Projects Gasoline Price Through to 2026
- What Will World Oil Demand Be in 2023?
- North America Rig Count Reduction Rumbles On
- What New Oil and Gas Jobs Will Exist in the Future?
- What Does a 2023 USA Recession Mean for Oil and Gas in the Country?