Job losses, writedowns tipped for oil and gas industry
Widespread job cuts, writedowns and project delays are predicted for Australia’s oil and gas industry as it struggles to cope with falling oil prices.
The price of oil has fallen by more than 50 per cent since August, to a low not seen since the global financial crisis in 2009.
The price freefall has hammered the value of Australian companies and eaten into their profits.
Peter Strachan, from Stock Analysis, said many companies were being forced to cut costs and axe jobs.
“Over the Christmas period there was a bit of a hiatus, but I think in the next couple of weeks, we’ll see a lot more talk, a lot more action in the oil and gas industry to cut costs,” he said.
Santos has already announced spending cuts across its business and Credit Suisse has predicted the company’s shares could become “worthless” if prices remain at current lows.
Mr Strachan said many local companies had managed to remain cash-flow positive but they could not withstand the low prices forever.
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