The oil and gas industry has always been a prime player in the economy. However, right now, the economy has been falling because of the COVID-19 pandemic. The market has crashed and lockdowns have been imposed all over the world. Fewer cars are traveling and several airlines have collapsed during this outbreak. These and other events resulted in a major decline in oil and das demands. Which yields big problems for oil and gas companies.
Oil and gas companies are at risk of collapsing
Low demand means oil is being sold for a much lesser price. In an interview in ABC news, an expert economist John Doggett has this say, “If oil continues to sell at such a low price some of those companies are going to have severe financial issues trying to survive. A lot of shell companies will probably have to shut down operations entirely and some are going to go bankrupt.” This is evident because one major oil company has already collapsed.
Status of major oil and gas companies today
Oil and gas companies are fighting to survive this predicament. Here are the newsworthy status of few major oil and gas companies today:
- U.S. Shale Company Whiting becomes first major bankruptcy of oil-price crash – Whiting was once the largest oil producer in the North Dakota Bakken region. Nevertheless, on Wednesday, it succumbed to the COVID-19 pandemic and filed bankruptcy.
- UAE’s Fujairah oil storage tanks at full capacity- industry, trade sources – Fujairah is one of two major ports in the region. Right now, it cannot store any more fuel at 10 million cubic meters.
- Total, BP outlooks cut to ‘negative’ – Total has announced plans to step up cost cuts. They will also suspend its share buyback program. BP said in March that it would aim to reduce spending.
- Brent crude was down at $25.33 a barrel – On March 30, 2020, Brent crude oil fell as low as $21.65 per barrel, its lowest since 2002.
- US West Texas Intermediate crude was down $20.13 a barrel – Like most oil companies, US West Texas intermediate felt the impact of the COVID-19 pandemic.
How oil companies react to this predicament
They say success is defined by how you handle problems. Today might seem bleak to the oil and gas industries. Some companies, on the other hand, know that there will be a rebound in the market soon. They are just adapting to the situation and here are some of them are handling it.
- PG&E offers additional support for customers amid the COVID-19 pandemic. – PG&E reassures its consumers that they understand their problems. The company has announced modified billing services for customers facing financial burdens. Like providing a helpline, number and allowing flexible bill payments.
- Companies providing COVID-19 protocols for their workers. – Exxon is only allowing trained operators into control rooms at its Baytown plant outside Houston, Texas. They are also required to remain at least 6 feet apart.
- Royal Dutch Shell’s positive reaction towards the pandemic. – Shell has increased its production of Isopropyl Alcohol. They have also enhanced their cleaning operations. This is to ensure the health of their employees.
This will be the worst time for the oil and gas industries to face any more problems. Problems like accidents and health issues for their respective employees. That’s why this is the most important time that your company’s COI is up to date and provides the best benefits possible. With all the problems that you are facing, it is best to lighten up your load with a reliable COI tracker.
Outlook for the oil and gas industries amidst the Covid-19 pandemic
The COVID-19 pandemic definitely made a heavy toll on the oil and gas industries. Despite this, the oil and gas industries remain strong. International Energy Agency has predicted that by 2021, oil demand will increase by 2.1 millions-of-barrels-per-day. With the US expecting to again become an exporter of petroleum products by this year. And projected to remain a net exporter in the wake of the COVID-19 (coronavirus) pandemic. Something that the US hasn’t done in 70 years. Now that’s one financially-positive thing the US oil and gas industry can start looking forward to.