• 5 minutes Is Pete Buttigieg emerging as the most likely challenger to Trump?
  • 7 minutes Can LNG Kill Oil?
  • 8 minutes Question: Why are oil futures so low through 2020?
  • 11 minutes US Shale: Technology
  • 2 mins “The era of cheap & abundant energy is long gone. Money supply & debt have grown faster than real economy. Debt saturation is now a real risk, requiring a global scale reset.”"We are now in new era of expensive unconventional energy
  • 3 hours CoV-19: China, WHO, myth vs fact
  • 7 hours Blowout videos
  • 1 day Question - What if there are no buyers for Chevron's Appalachia Assets?
  • 2 hours Democrats Plan "B" Bloomberg Implodes. Plan "C" = John Kerry ?
  • 2 hours Don't sneeze. Coronavirus is a threat to oil markets and global economies
  • 2 days OIL trades as if the virus is a 1 quarter event. As if it's Containable, Reversible and Temporary. Is it ?
  • 21 hours Natural Gas
  • 2 days Energy from thin air?
  • 1 day Cheap natural gas is making it very hard to go green
  • 2 days Coronovairus, Phase One Agreement, Lower for Longer
  • 2 days Hey NYC - Mayor De Blasio declares you must say goodbye to fossil fuels. Get ready to freeze your Virtue Signaling butts off.
Why The World’s Top Oil Traders Are Going Green

Why The World’s Top Oil Traders Are Going Green

Oil traders, however, seem to…

U.S. Administration Discusses Plan To Oust Venezuela’s Maduro

U.S. Administration Discusses Plan To Oust Venezuela’s Maduro

Officials at the Trump Administration…

UK Oil Industry Under Serious Threat From Low Oil Prices

UK Oil Industry Under Serious Threat From Low Oil Prices

The plunge in oil prices is ruining the United Kingdom’s oil industry in the North Sea, according to a leading executive in oil exploration.

“It’s almost impossible to make money at these oil prices,” Robin Allan, the chairman of Brindex, the oil-exploration association, told the BBC in an interview broadcast on Dec. 18. “It’s a huge crisis.”

Allan, also a director of Premier Oil, said, “This has happened before, and the industry adapts, but the adaptation is one of slashing people, slashing projects and reducing costs wherever possible, and that’s painful for our staff, painful for companies and painful for the country.

"It’s close to collapse,” Allan said. “In terms of new investments, there will be none, everyone is retreating, people are being laid off at most companies this week and in the coming weeks. Budgets for 2015 are being cut by everyone.”

Related: The Global Energy Security War

Recent developments support Allan’s thesis. Several companies say they’ll spend less in the coming year because the low price of oil, which has declined by more than 40 percent since June, has cut deeply into their revenues.

One of many is the US oil giant ConocoPhillips, which announced on Dec. 8 that it would be cutting its capital budget for 2015 by 20 percent and postponing major investments in oil fields in North America. “We are setting our 2015 capital budget at a level that we believe is prudent given the current environment,” ConocoPhillips CEO Ryan Lance said Dec. 8. That environment includes a 16 percent drop in the value of the company’s shares since prices began falling in the summer.

Part of the ConocoPhillips cutback is the company’s decision to cut 230 out of 1,650 jobs in the UK. Other energy companies, British and foreign, doing energy work in the UK also are retrenching. They include the US oilfield-services provider Schlumberger, Scotland’s Wood Group and the US company Apache.

Oil and Gas UK, Britain’s energy trade association, said it couldn’t comment on any opinions or business decisions of its members, but it “recognizes that the falling oil price is affecting activity across the UK Continental Shelf, and companies are having to take hard decisions in light of this challenging business environment.”

Related: How Energy Secure Are The EU And UK?

Despite such a gloomy outlook for Britain’s oil industry, there’s also evidence that other areas of the UK economy could benefit. In fact, British accountants at PricewaterhouseCoopers (PwC) say the drop in the price of oil “should be a net benefit to our economy as a whole, even if there [are] some losers in the UK oil and gas sector.”

PwC’s chief economist, John Hawksworth, said: “In essence, an oil price fall acts like a tax cut for the economy, but a particularly favorable one in the sense that the burden of lost revenue is primarily borne by the major oil producers such as the OPEC member countries and Russia.”

That also could mean trouble for Britain, which is also a major oil producer, Hawksworth said, but he stressed, “[W]e are now a net oil importer, so there should be a net benefit to our economy as a whole.”

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage


Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News