Rig maker Lamprell expects tough year

Oil and gas industry adjusting to 'new realities,' company's CEO says.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   Jan. 12, 2015 at 9:04 AM
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SHARJAH, United Arab Emirates, Jan. 12 (UPI) -- Emirati rig builder Lamprell said Monday it expects the weak market for crude oil will impact its ability to land new contracts in 2015.

The oil services company said it had a strong year in 2014, but didn't anticipate a replication of that success.

"With the recent slump in the oil price, winning work in 2015 is going to be a challenge as the industry adjusts to the new realities," Chief Executive Officer Jim Moffat said in a statement.

Oil prices have lost roughly half of their value since June as markets tilt toward the supply side in a weakened global economy. The price is forcing some industry leaders to cut back on capital spending plans for 2015, which is spilling over into secondary energy sectors.

Last week, U.S. Steel Corp., which makes steel pipes for the oil and gas business, announced plans to close two of its plants and lay off 756 workers because of the downturn in oil prices.

Lamprell said it was anticipating announced reductions in capital spending would mean very little in the short term, but long-term, its prospects may be facing the same fate as those companies actively exploring for or developing oil and gas resources.

"We anticipate intense competition with a large number of players chasing fewer projects, leading to increased pressure on margins," it said.

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