To get to zero, British oil companies need $ 40 Brent

Up to 30 thousand workers in the UK oil and gas industry will be laid off, and industry revenues will decline by almost 40% compared to last year.

To get to zero, British oil companies need $ 40 Brent
This March 27, 2018 photo shows a silhouetted Syrian oil worker next to a pump at an oil field controlled by a U.S-backed Kurdish group, in Rmeilan, Hassakeh province, Syria. Since the Syrian government left the predominantly Kurdish area in northern Syria, the Syrian Kurds have been in control of some of the country’s largest oil fields in Hassakeh province in the northeast starting in 2013. Many former government employees stayed on, and their salaries continued. (AP Photo/Hussein Malla)

Such forecasts were made for the industry on Tuesday, April 28, by the British non-governmental organization Oil & Gas U.K.

Analysts believe that the crisis could last for the next 12-18 months.

“The prospects are bleak compared to the picture of sustainable growth observed only two months ago,” the report said.

According to estimates by Oil & Gas U.K., revenue from production on the UK continental shelf this year could fall to 15 billion pounds [18.7 billion dollars]. Last year, this figure reached 24.5 billion pounds.

Moreover, if the average price of Brent oil this year is $ 35 per barrel, the British oil sector will not even be able to recoup the costs.

“It is possible that this year, the UKCS [Continental Shelf of the United Kingdom] will face negative cash flow for the third time in 40 years since the pool first saw positive cash generation,” Oil & Gas U.K.

So that British oil producers could go to zero, they need Brent crude oil on average at $ 40 per barrel. Currently, the price of July Brent futures is approximately $ 23 per barrel.

Such realities make oil industry workers expect a reduction in drilling volumes of more than a third – to the level of four years ago.

Comments:

Loading ...