Europe’s biggest oil companies have to find deeper cuts as oil prices expected to weigh on earnings
By Andrew Critchlow, Commodities editor: 27 July 2015
Three of Europe’s biggest oil companies will report weaker earnings this week and the City is looking for guidance on how to mitigate a sustained slump in Brent crude prices beyond the cost cuts already in motion.
In a market defined by oil prices 60pc lower than they were a year ago, energy giants are running out of options to protect their bottom line and all-important progressive dividends.
The brakes have already been put on 45 oil and gas development projects worth $200bn (£129bn) since prices started to fall towards the end of last year, according to a new report from Edinburgh-based consultancy Wood Mackenzie. Combined, these projects account for around 20bn barrels of reserves. The danger is that international oil companies will reveal this week that even deeper cuts are planned, tipping the industry into a form of atrophy.
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