Posted on 03/24/2015 5:06:03 AM PDT by thackney
Saudi Arabia’s refusal late last year to rein in oil production helped trigger the price crash that has hurt oil-producing countries and publicly listed energy companies alike. And now even the kingdom’s own oil company is feeling the pain.
As a result, state-owned Saudi Aramco is looking for ways to cut costs everywhere, from pushing contractors for better deals on oil-well services to negotiating discounts on its phone and power bills, according to people familiar with the matter.
The company—the world’s largest oil producer—is also considering slashing its future spending on production and exploration by as much as 25%, much like private oil companies, industry sources said.
“Like everyone else, we’re using the downturn as an opportunity to sharpen our fiscal discipline,” Aramco CEO Khalid Al Falih said in public remarks during the World Economic Forum in Davos in January. “We’re cutting on a few things that we could cut, but we’re as committed as ever to our long-term strategy.”
The measures demonstrate some of the risks the Organization of the Petroleum Exporting Countries took when it decided in November to forsake its traditional role of cutting production to boost prices. The Saudi-backed decision has hurt big, publicly listed companies, such as Royal Dutch Shell PLC and Chevron Corp., but is now ricocheting and hitting national oil companies.
Not only is revenue to state treasuries falling, but OPEC nation oil companies—like their private counterparts—are making cuts that may make it difficult for them to capitalize when prices begin to rise.
The measures are a departure for Aramco, which had boosted its spending on pumping oil and launched its first efforts at deep-sea production when crude was regularly trading at more than $100 a barrel from 2011 to 2014. The price of Brent crude, the world benchmark, has nearly_halved since June...
(Excerpt) Read more at wsj.com ...
Article from last month
ISIS hardest hit.
Pray America is waking
First, I take exception to the notion that lower oil prices are "bad". Second, did any country reduce its oil production?
If Saudi Arabia wants its economy dependent on a one trick pony, it better not whine when that pony dies.
And Putin
Did you hear Limbaugh several weeks ago talking about how no one predicted this drop in oil prices? It was a really good segment which included pointing out how the “experts” don’t really know that much. He also talked about the economic factors that the left doesn’t notice or report because it opposes their agenda. One I remember is that the communist economies are not as strong as reported.
Keep that in mind with all the new predictions for prices later this year.
If someone could consistently predict the future price of oil, Bill Gates would be their pool boy.
The Saudis aren’t whining.
So do I, but I'm amazed at how many Freepers seem to wish that we could get right back to $4.00 a gallon to keep the North Dakota boom a boomin'.
They can cut costs by quitting their support for wahabbism.
Muslims.
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