Oil industry slipping into the red as outlook dims

Thu Oct 29, 2015 12:49pm EDT
 
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By Ron Bousso, Karolin Schaps and Anna Driver

LONDON/HOUSTON (Reuters) - The oil sector is slipping into the red after years of fat profits as the steep slump in oil prices shows little sign of ending, with this quarter shaping up to be the worst since the downturn started.

The world's top oil companies have struggled to cope with the halving of oil prices since June 2014. They have cut spending repeatedly, made thousands of job cuts and scrapped projects.

The lower-for-longer outlook for oil prices took its heaviest toll yet in the third quarter as oil companies again reported a dramatic drop in income. Some saw results swing into the loss column, and the industry had billions of dollars in impairment charges.

"This downcycle poses significant challenges," Jeff Sheets, ConocoPhillips' (COP.N: Quote) chief financial officer, told investors on a conference call after the company posted a loss.

With 10 of the top 20 European and North American oil and gas producers having reported third-quarter results, seven have posted losses.

These include Royal Dutch Shell (RDSa.L: Quote), Italy's Eni (ENI.MI: Quote) and in North America Occidental Petroleum Corp (OXY.N: Quote), Anadarko Petroleum Corp (APC.N: Quote), Hess Corp (HES.N: Quote), Suncor (SU.TO: Quote) and ConocoPhillips.

Shell posted a third-quarter loss of $7.4 billion on Thursday, hit by a massive $8.2 billion charge after halting its exploration in Alaska's Arctic sea and a costly oil sands project in Canada.

  Continued...

 
The Shell Oil Company's drilling rig Polar Pioneer is shown in Port Angeles, Washington May 12, 2015. REUTERS/Jason Redmond