PETALING JAYA: Oil and gas (O&G) companies with exploration and production (E&P) exposure are expected to be the first casualties in a prolonged impact of falling oil prices.
MIDF Research, in a report, said the sharp plunge in oil price will definitely hit the upstream E&P players the most, given that the oil productions are directly correlated to the oil price.
“In a prolonged oil price war environment, globally, we anticipate oil majors to cut or delay some portion of their planned capital expenditures (capex) for 2020 which in turn, could potentially result in delayed contract awards for the O&G service providers.
“Therefore, the low oil price environment is negative for the oil and gas players.”
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