Recent times have seen a trend of rising oil prices and some are beginning to see signs of a fragile stability in the upstream oil and gas sector. Those of a more optimistic persuasion are identifying indications of predictability and a basis for investment in long-stalled prospects and a resumption of normal service in relation to day-to-day corporate activity.
Processes of business adjustment and cost management are seen to have re-modelled a number of businesses to be appropriate for an environment of lower, or less volatile, petroleum prices. Those upstream companies which have been in thrall to their lenders or bond-holders are largely seen to have re-structured their business and themselves so as to placate these foes for now, if not yet escape them for good. Some companies have sadly succumbed to the hostile business environment of recent years. And as a degree of confidence has returned to the sector, will the buoyancy of higher prices see the traditional participants return to their old ways, or have things changed for good?
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Reproduced with permission from Petroleum Economist and first published in PE Outlook 2019: A year of turbulence in December 2018; contributing authors: Michael Polkinghorne, Philip Stopford and Jason Webber, White & Case LLP, White & Case LLP. For further information please visit: http://www.petroleum-economist.com/articles/markets/outlook/2018/pe-outlook-2019-a-year-of-turbulence
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