OIL CEO: The oil industry is facing ‘a full-scale’ crisis
Bob Bryan
BusinessInsider.com
Apr. 23, 2016
Stop me if you’ve heard this one before: The oil industry is in some serious trouble.
Prices have plummeted because of a global oversupply, and many companies are facing mountains of debt, loads of expenses, and cratering profits.
If you’re looking for some good news on the industry, you should look elsewhere. Schlumberger CEO Paal Kibsgaard laid out a disastrous forecast for the sector in the company’s quarterly-earnings call.
“Activity fell sharply in the first quarter, as the industry displayed clear signs of facing a full-scale cash crisis,” he said. “We experienced activity reductions worldwide, with the rate of disruption reaching unprecedented levels.”
While oil prices have increased, they are still low by historical standards, so many companies are curtailing production activity.
This is especially bad news for Schlumberger, since the company provides services and equipment to support drillers. Thus, as the number of rigs in the US continues to hit new lows, there is little need for the support services.
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