The North Sea has struggled to compete against cheap oil in the Middle East, lower risk and short-cycle U.S. shale, and even expensive offshore oil fields in relatively less explored places like South America, West Africa or the Eastern Mediterranean.
Third quarter earnings figures for the oil majors reveal a mixed picture for the industry: Companies are dealing with more debt, weaker refining margins, and deeper spending cuts, but they are also experiencing increased optimism that the worst might be over.
The oil majors are living off of yesterday’s discoveries, and choosing to pay shareholders at the expense of future growth.
For Britain’s oil sector, the possibility of a “Brexit” has not raised alarm bells as of yet, but there could be higher costs for the industry if Britain breaks up with Europe.
If oil prices do not rebound substantially, the oil majors will not be able to keep up such high levels of spending and still offer shareholders such generous dividends.
The Governor of Alaska has proposed changes to how the state collects revenue, a recognition that the state’s best oil days are likely in the past.
The decline in oil prices that began in mid-2014 has wreaked havoc across all different types of companies in the industry, and there seems to be no respite in the short run. Companies are continuing to lay off staff, cut back on projects, and report eye-opening losses.
As oil prices head towards $30 per barrel, oil companies are forced to use layoffs, asset sales, capex cuts, and debt in order to survive.
Unmanned aerial vehicles, or “drones,” have been used to drop missiles on military targets for years, but they are rapidly expanding into commercial markets, including the oil industry. Drones offer all sorts of applications that the industry can use.