August 19, 2022

Oil and gas companies set to lose $1 trillion

Oil and gas exploration and production companies, or E&Ps, are slated to lose a staggering $1 trillion in revenues in 2020, consistent with analysis by research firm Rystad Energy.

The E&P industry, which incorporates oil majors, made $2.47 trillion in revenues globally last year, the firm says.

bring in $1.47 trillion, reflecting a 40% decline year-on-year. It comes because the coronavirus pandemic and ensuing lockdowns cripple demand and force companies to slash spending and cancel projects.

Before the virus began to hit economies, Rystad projected E&P revenues for 2020 to succeed in $2.35 trillion.

The slashed revenues, an identical story for many industries amid the worst economic downturn. Since the good Depression, they have clearly manifested themselves. Within the industry’s equity market position.

S&P Index

the smallest group within the whole S&P index. The industry now represents just 3% of the index, compared to fifteen a decade ago and 30% in 1980.

The price of worldwide oil benchmark Brent crude is down quite 60% year-to-date to its lowest in additional than 20 years, and this month saw an oil derivative instrument turn negative for the primary time in history because the world runs out of space for storing, forcing producers to require rigs offline and enclose production.

Exxon is cutting its capital spending globally by 30%. Exxon CEO Darren Woods expects oil demand to fall by between 25% and 30% within the immediate term. Chevron, BP, Shell and Saudi Aramco are among other major producers that have announced spending cuts of between 20% and 25% in their operations globally. As an industry, oil companies have thus far slashed $54 billion in planned spending, Reuters reported this month.

U.S. shale, with higher production costs than many foreign competitors, is that the largest contributor to the present thus far , with rigs and projects dropping like flies. The Energy Information Administration reported that U.S. production has now plunged by 1 million bpd, pumping 12.1 million bpd last week compared to a record 13.1 million bpd in mid-March.

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