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Page added on July 26, 2020

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The oil crisis shakes industry

Business

As expected, the two largest oil services companies Schlumberger and Halliburton have announced figures that highlight the scale of the oil and gas crisis shaking the planet.

Schlumberger is laying off 21,000 of its 85,000 employees in 120 countries. Halliburton has already separated 4,500 out of 55,000 employees.

Falling oil prices and demand have forced producers to decrease the pace of their extractions. As in every crisis, service companies are the first to take the shock, which will eventually spread to the entire industry.


Schlumberger has a net loss of $ 3.43 billion in the second quarter of 2020 and will forecast $ 2.7 billion in restructuring and write-down charges for the end of the year.

For its part, Halliburton, the American oil firm close to the president, posted a loss of $ 1.68 billion. Even with government aid, it’s expensive for the quarter.

Schlumberger CEO Olivier Le Peuch thinks “In the short term, oil demand is slowly starting to normalize and is expected to improve thanks to measures taken by governments to support consumption. But, even if demand is picking up slightly, the oil majors are still in economy mode».

The Norwegian oil agency, Rystad Energy, believes that the oil services sector, such as Schlumberger, Halliburton, Baker Hughes, TechnipFMC or Vallourec, will cut one in five jobs worldwide in 2020. One in five this translates to 1 million d ‘jobs! Although this figure may not be reached, we can imagine the scale of the earthquake.

The USA would have lost 100,000 jobs and 38 bankruptcies stunned the shale sector which is in free fall.

Towards an oil shortage?

The trend followed by service companies shows the probabilities of a transition from surplus production to shortage. This will all depend on the speed of the economic recovery.

As global demand for oil and gas recovers, the challenge will be to meet it on time. The level of discoveries of new deposits is at its lowest for 60 years and the shale bubble seems to have deflated to reach its peak by 2025 in the USA.

The current oil shock has severely shaken the architecture of the oil and gas industry in terms of the majors, refining, human resources, exploration, production and financing. Logically, several banks and agencies believe that prices should rise sharply during the years 2021-2022 as long as the world economy supports it.

Rystad Energy even predicts a peak in production by 2027. We can without hesitation qualify the word peak oil in the mouth of the Norwegian agency as a surprise.

Three trends to watch very closely

The penetration of electric cars in the market. This trend will be further accentuated by the increase of Chinese electric supremacy over the world economy. The first post-covid figures show a drop in demand for combustion vehicles.

In addition, after Germany, South Korea, Japan and China, Russia has just announced major investments in hydrogen mobility, just to get out of the Chinese clutches of rare earths and electric batteries.

Eventually, the curve of the global economy and the needs for the use of sea, air or land transport will come full circle.

Thus, it is not unlikely that the world will begin to deal with the climate for lack of oil!

world news today



6 Comments on "The oil crisis shakes industry"

  1. Sissyfuss on Sun, 26th Jul 2020 10:44 am 

    Covid is a degrowth mechanism designed to cull the herd and give halt to environmental destruction. It’s not powerful enough to achieve a reset on it’s own, it’s just the beginning salvo of the coming war between humanity and the biospere. Dig a trench and keep your head down, skirmishes are appearing world-wide and growing more numerous.

  2. Davy on Sun, 26th Jul 2020 10:58 am 

    The world has many decades of cheap oil left. The bad news for us Americans is most of it is in Eurasia.

  3. Dracula on Tue, 28th Jul 2020 10:58 am 

    We have more than 50 years of oil left.

  4. Duncan Idaho on Tue, 28th Jul 2020 11:53 am 

    What the coronavirus has revealed is the power of America’s cult of selfishness. And this cult is killing us.

    Darwin is working hard—

  5. Abraham van Helsing on Wed, 29th Jul 2020 5:17 am 

    Germany isn’t waiting for conventional oil and gas to run out and has reached an agreement with Morocco about the production of green hydrogen from the desert, where meanwhile a kWh of raw PV-electricity costs somewhere between 1-2 cents, almost too cheap to meter:

    https://deepresource.wordpress.com/2020/07/29/german-moroccan-hydrogen-agreement/

    Germany has the ambition to become the world’s #1 supplier of electrolyzer equipment, not a major hydrogen producer. German produced and financed industrial hydrogen installations and perfect African solar conditions are a match made in heaven and finally Africa has something it can compete with on international markets: hydrogen. And just like Arabs could acquire enormous wealth because they happened to sit with their camel jockey asses on oil and gas, likewise Africans can finally get in touch with serious money by producing hydrogen for Eurasian markets.

  6. Abraham van Helsing on Wed, 29th Jul 2020 5:19 am 

    What the coronavirus has revealed is the power of America’s cult of selfishness. And this cult is killing us.

    Darwin is working hard—

    The only thing that is really killing America is libtard loons like Duncan, who think it is a good idea to inundate America with third worlders. The coronavirus only kills people who are on average 75 years old and who would have died anyway shortly from “underlying conditions”, like being “morbid obese”.

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