Sunday , November 19 2017

Mega energy projects hit by oil slump – report

KUWAIT CITY, Sept 22, (KUNA): Due to the continuing slide in the price of oil worldwide, numerous mega energy projects totaling USD 118 billion in value have been put on hold by the world’s major oil companies, said a report issued here on Tuesday by the Diplomatic Center for Strategic Studies.

Many of the oil industry majors have resorted to cost-cutting measures to stave off the decline in oil prices, said the report. For instance Royal Dutch Shell is contemplating laying off 6500 employees during the course of this year, having incurred revenue losses totaling about 37 percent during the 2nd Quarter of this year.

Shell has also announced reductions in its capital investments for the second time this year to the tune of USD 3 billion, said the report, noting that other companies are planning to lay off workers such as the British energy company Centrica which plans to lay off about 6000 workers and scale back its gas exploration operations.

Likewise, the US giant energy firm Chevron has announced laying off about 1500 workers to keep costs down, in view of having its revenues slashed by almost 90 percent in the 2nd Quarter of this year, said the report.

Moreover, the US energy company ExxonMobil incurred a 50 percent loss of its revenues in this year’s 2nd Quarter, having had a net profit of only USD 4. 2 billion compared with USD 8.8 in the same quarter last year, said the report.

Regarding expectations for the price of oil, the report said the nuclear agreement between Iran and the major industrial nations would probably have a deleterious effect on the price of oil in world markets, as Iran begins to pump out oil from its huge reserves in a way that would influence the price of oil in perhaps 2016.

The report further expected that the price of Brent crude might reach USD 62 per barrel next year and that the average price of US crude might get to USD 57 per barrel in that year.

With the current oil glut in the markets and declining prices, the report estimated that it would not be outrageous for the price of oil to reach as low as USD 30 in the remaining months of this year.

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