Monday 6 April 2020

The world has been transformed in the past month since the Covid-19 pandemic took hold. The dramatic impact of COVID-19 on global oil demand has been compounded by Saudi Arabia and Russia failing to agree production cuts to stabilise oil prices. With Brent trading well below US$30/bbl the resilience of the sector is once again being pushed to its limit. 

Westwood analysis suggests that if the oil price remains below US$27/bbl for the remainder of the year, UKCS production is not generating enough revenue to cover both operating costs and the planned capital expenditure in 2020. Norway fairs better and even with an oil price below US$20/bbl for the rest of the year it can still cover its operating and capital costs. Meanwhile, companies are cutting discretionary spend and deferring expenditure where they can

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