Heavy losses for the giant oil companies due to “Corona” –...

Heavy losses for the giant oil companies due to “Corona” –...
Heavy losses for the giant oil companies due to “Corona” –...

The “Covid 19” epidemic and the decline in oil prices it caused, resulted in heavy losses for the giant oil companies, which find themselves forced to limit their activities in exploration and exploration significantly.

In the North Sea, exploration activities decreased by 70% in the United Kingdom and 30% in Norway, compared to the plans that were planned before the crisis, according to a study by the “Westwood” Center on Energy, and the American “ExxonMobil” reduced its investments by 30%, equivalent to 10 At least billions of dollars, Italian and British BP, Equinor, and Saudi have also reduced their activities.

The companies dealing with energy giants are also paying a high price. The French “CGG” group, which works in the field of analyzing subsoil resources, expects this year a 40% decline in its business.

And more than 30 exploration and production companies have been bankrupt in the United States since the beginning of the year, according to the Texas law firm Heinz and Bonn. As the price of West Texas Intermediate crude has remained stuck at $ 40 a barrel for a long time, 150 other companies may join it by the end of 2020, according to estimates by analysts from “Rystad Energy”.

And with the shift to more environmentally friendly energy that would greatly flood the long-term demand for black gold, the outlook for the entire sector is bleak.

“The exploration of oil has taken a heavy blow this year with the collapse of demand, prices and oil due to the global epidemic,” said analyst from “PVM” Stephen Brennock to France Press.

“The markets are no longer pinning our hopes on the future of oil,” SEP analyst Pjarn Schildrup told France Press.

Rafaela Hain of GBC Energy expects that outside the United States, where things take longer, exploration programs will resume in all major supply areas and will approach pre-crisis levels next year.

“We have seen that the huge cuts in spending in the budgets of the big companies have not really affected their future production, because the search for new fields is, to a lesser extent, a matter of survival,” she emphasized.

But combating climate warming changes the picture, as the British company “BP” and other companies consider that oil demand in the world has already reached its peak and will not stop its decline from now on.

According to Westwood, and despite the changes that have been taken towards producing more environmentally friendly energies, the plans for the big companies’ method show that the appetite for exploration still exists, but it is colliding with the recovery of crude prices.

Brent and WTI prices fell in an unprecedented way in March and April, and appear to be stuck at around $ 40 a barrel, which is too low to allow many of the players in the sector, especially Americans, to achieve a commensurate rate of return.

On the other hand, emerging exploration projects are emerging, such as in the Arctic Ocean, which is believed to contain 13% of the oil reserves and 30% of the undiscovered natural gas reserves in the world, a task that has become easier with the rapid retreat of the ice cover.

The Russian company “Gazprom Neft” and the English-Irish “Shell” announced their alliance for exploration and exploration in the Arctic Peninsula.

The Donald government approved the mid-August project, which opens the way for oil by-products exploration in the largest natural reserve in the United States, in Alaska.

The exploration project includes a coastal area of ​​about 70,000 square kilometers, equivalent to the size of Ireland, along the Arctic Ocean.

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