AMERICAN OIL COMPANIES ARE AT RISK OF BANKRUPTCY

According to the US sources, 17 oil producers in the United States have already switched to bankruptcy proceedings for the moment. The experts believe that by the end of the year, 73 oil producers of the state might declare insolvency. The debt of $ 14 billion, accumulated due to the pandemic and a serious drop in hydrocarbon prices, undermined the American shale industry.

Currently, as the experts say, many companies are on the brink of survival. Well conservation and almost complete abandonment of drilling cannot compensate for the losses. Demand for energy carriers fell, and the storage facilities for oil products were almost full. As Regina Mayor, heading the energy and natural resources department at KPMG pointed out, a wave of restructuring could sweep the industry.

If the oil prices remain below $ 30 per barrel, 170 more oil producers are likely to face bankruptcy next year.

The analysts recall that after the end of last month, the price of WTI crude oil fell to negative levels, and the manufacturers were forced to pay extra for the raw materials, which is why they still cannot recover. The prices that returned to $ 30 per barrel remain two times lower than at the beginning of this year. Even before the pandemic, the oil-producing companies were under pressure from the dissatisfied investors - a high level of debt and insignificant financial results did not leave any room for optimism.

Now the situation is much worse. The experts from the Haynes and Boone law office, whose specialization is energy companies, believe that 50% of the market players among 60 major producers of "black gold" in the United States may require additional financial investments. But there are many smaller companies that need it as well.

The United States continues to be the largest oil producer in the world.

However, the decline in business activity in the country, and especially in the oil sector, is forcing management to reduce staff and cut costs. This, in turn, has a direct impact on oil services. According to the Rystad Energy analysts, they have already started firing a fifth of the employees all around the world — about a million people, more than 200,000 of whom work in the United States.