The oil price drop has been severe, with a profound effect on the industry. Almost every business is reassessing how it operates and looking for ways to respond – cutting costs and discretionary capex, all the while enhancing production volumes to keep their head above water.
Yet, the wholesale changes haven’t been matched by the anticipated wave of full-scale restructurings. Many upstream oil and gas groups were well hedged for 12-24 months when the crisis started – but that could finally be about to change.
At the beginning of the drop, many thought it would be a blip on an otherwise positive trajectory for the industry. Some took short-term bridging steps necessary to see them through to an expected recovery in the market, without anticipating what might lay further ahead.