Businesses across the energy sector are increasingly adopting a lean approach to cash-flow to improve their resilience to the challenges the low oil price continues to bring.
Big US oil companies are starting to think small. A stubborn 16-month crude rout with no end in sight is driving the largest US oil producers away from costly, high- risk megaprojects long touted as the industry’s future and toward safer shale operations that generate the cash needed to satisfy anxious investors. Exxon Mobil Corp., Royal Dutch Shell, Chevron Corp., ConocoPhillips and Hess Corp. have all either delayed or abandoned projects that range from the deep seas of the Gulf of Mexico to Canada’s oil sands and the US Arctic. At the same time, Exxon and Chevron both announced plans to substantially increase US crude production, largely as a result of their shale operations.
Listed UK manufacturers weighed the effects of the global oil and gas downturn on their businesses revealing mixed results yesterday. Engineering components firm Meggitt hailed a 6% boost to its half year profits thanks to its aviation spare parts business which offset a decline in its oil and gas valves business. Meanwhile, pump actuator maker Rotork said its oil and gas business saw revenues drop £15million as it was hit by weak oil prices and political instability. Meggitt rose to the top of the FTSE-100 leaders board last night, up 8% after half-year results showing pre-tax profits up 6% to £152 million at the engineering group.