Downturn shifts to pipeline companies
Thursday September 22, 2016
Almost two-thirds of the industry professionals contacted in consulting firm Deloitte’s annual oil and gas survey said the recovery has already begun, or will next year, the firm said on Thursday. Companies are still focused on cutting costs. But executives expect oil prices to rise, capital expenditures to increase and hiring to rebound over the next year.
If last year was the year of hard decisions, 2017 will be the slow road back,†said John England, vice chairman, Deloitte LLP and U.S. and Americas oil and gas leader.
At the same time, survey respondents thought the downturn was moving to pipeline companies.
Severe cuts to exploration and production company spending is beginning to wear on pipeline firms, once thought to be somewhat immune from commodity price volatility,†said Andrew Slaughter, managing director of the Deloitte Center for Energy Solutions.
Pipeline contracts are now being renegotiated or challenged in bankruptcy court by troubled exploration and production companies, Slaughter said.
Almost two-thirds of the pipeline executives surveyed expected a moderate level†of company consolidation this year and next.