The UK’s Job Retention Scheme has proved a lifeline for many employers and a way to ensure employment is protected while oil and gas firms deal with the double hit of Covid-19 and the drastic fall in oil price. The uptake figures demonstrate the need for the scheme, with over nine million people in the UK expected to be furloughed, yet the decisions to furlough staff have often been made quickly with little planning for the scheme ending.
The Covid-19 pandemic has created a severe demand shock for the energy market, coinciding with an oil price war that has caused prices to plummet further.
My recent Energy Voice article comparing Battery Electric Vehicles (BEV) with Hydrogen Fuel Cell Electric Vehicles (FCEV) generated some interest. To my mind the BEV has clear benefits from an energy efficiency standpoint, as an FCEV requires twice the energy of a BEV.
How can energy supply chain companies weather the perfect storm of the oil and gas price crash, Covid-19 lockdown and social distancing, pressure to fully decarbonise and, of course, Brexit?
With Covid-19 causing significant cashflow issues for most companies trading in the UK, we recommend you carefully consider whether you are undertaking research and development (R&D) work. If you are, it means you can boost your cashflow by making a claim for R&D tax relief.
Energy companies are used to weathering disruption of all kinds. And during this incredibly challenging time, we are now more than ever relying on them for the safe access and delivery of power, gas, water and other essential services.
As governments around the world enact drastic measures to slow down transmission of the COVID-19 outbreak, energy companies are facing multiple challenges: from the health and well-being of employees to disruption in the supply chain and from working capital shortages to complete closure of operations. They have also been squeezed by a big drop in demand for both oil and natural gas, which has led to lockdowns, a collapse in industrial activity and travel bans all over the world. Oil prices have been sent crashing to their lowest level since 2001, while gas demand has fallen by as much as 20% in some cases.
As an industry, as businesses and, most importantly, as people – this is an incredibly tough time. No matter where you are in the world, or what you do, we have all been impacted by the coronavirus in some way.
As entire industrialized countries remain in lockdown amid the COVID-19 pandemic, global oil demand continues to fall at an unprecedented rate and the International Energy Agency has warned that demand for fuel could drop to lows not seen since 1995.
Coronavirus looks set to have a continued impact on energy demand beyond the near term and supply chains must become more adaptable in order to navigate the uncertain future, writes Andy Laven, COO of Sahara Energy Resources DMCC
Production cuts may not be enough to rebalance the market now, but they can help its recovery in the second half of 2020 according to Boris Ivanov, Founder and Managing Director of GPB Global Resources.
According to the International Energy Agency, natural gas currently accounts for 23% of global primary energy demand and nearly a quarter of electricity generation.
The UK government has in the past month or so adopted a number of extraordinary measures designed to support UK businesses throughout the COVID-19 storm.
By decarbonising industrial and domestic heating, I am convinced that hydrogen has a significant role towards achieving net zero. However, the role of hydrogen in the passenger car sector is much less clear. I find it difficult to see how a hydrogen powered fuel cell electric vehicle (FCEV) can compete with a battery electric vehicle (BEV). That conclusion was reinforced by two recent reports from BloombergNEF and Volkswagen.
Oil prices have plunged to record lows this past week. While one particular benchmark, West Texas Intermediate, went below minus $40 per barrel a week ago, that is headline grabbing but not the primary concern.
It's not the strongest species that survive, nor the most intelligent, but the ones most responsive to change. Certainly, that’s what Darwin believed and who am I to question him?
The global oil industry is facing its biggest crisis in peacetime in 100 years, as the toxic combination of the Covid-19 pandemic and oversupply drive prices to record lows.
Unprecedented, unbelievable, ‘off-the-scale’ can’t really sum up what happened to oil prices in North America on Monday April 20. Both WTI (West Texas intermediate) and WCS (Western Canadian Select) plunged to below $0 per barrel and recorded an oil price of minus $38 per barrel for the first time in history. Although there has been talk about negative oil prices for months, nobody really predicted anything on this scale.
As the oil market collapse has taken WTI into the uncharted and “impossible” territory of negative prices, there has been considerable attention not only on where prices might be going, but also what is happening to the forward curve, and what it means. Even in more normal markets, the structure of the forward curve “backwardation” and “contango” is a source of confusion – mystery even.
As Coronavirus lockdowns continue to spread around the world, the oil industry faces more disruption to demand and supply chains, with many margins and prices already collapsing.
By Claire Scott, legal director and employment energy specialist, Pinsent Masons
The furlough scheme is certainly helpful to energy sector employers and employees but there are some grey areas which mean businesses and individuals may not benefit as was intended.
