PwC believe that lower oil prices for longer is the most likely scenario
In February 2015 PwC published their viewpoint, ‘Opportunities in adversity – A new dawn for Oil and Gas’, following on from the 60% collapse in the oil price that had occurred since July 2014. At the time, there was no clear consensus about what shape the price recovery would take. In the past, the price has sometimes rebounded quickly, for example after the 2008-9 collapse, but at other times has stayed depressed for a prolonged period, such as after 1986.
PwC believe that this second scenario, of the oil price staying lower for longer, is the most likely at present given the current and anticipated future supply glut in the market. In light of this they have recently published their second paper ‘Opportunities in Adversity: Strategies for a lower oil price’ where they take a critical look at what this means for the sector and focus on two key imperatives to success in a prolonged low oil price environment:
(1) Developing a business strategy truly driven by a company’s capabilities
(2) ‘Right-sizing’ the cost base to sustainably deliver the chosen strategy
The full report can be accessed on PwC website www.pwc.com.cy/oil-gas-prices