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Quotes from the news wire:
It's easier to cut than to redeploy, the companies have very little wiggle room, there is no room for error. You miss you're dead.
– Fadel Gheit
At the end of the day, what is going to separate companies is the quality of their assets, their cost structure and their financial flexibility.
Oil prices played a big part, but Petrobras has itself to blame too, it's a classic case of mismanagement and government interference. Low oil prices pushed them over the cliff, but they got to the precipice themselves.
It will be a day of reckoning as we get closer to the end of this year and people realize that average prices are not likely to match current expectations, i'm not willing to make bets that there'll be disruption of oil flow from the Middle East or elsewhere that will give us $ 70 oil.
Petrobras is great at over-promising and under-delivering. They are notorious in the industry, i don't know how anyone takes them seriously.
For Shell to back down at this point, it's a defeat, it's disgraceful, it's costly.
This could go on into 2016, barring a meaningful recovery in the oil price. I think the trend continues for lower capital spending.
He is right if oil prices remain under $60; he is dead wrong if prices go beyond $75.
If I were an oil company today, I would talk about one thing: how far can you cut costs, they cannot control anything else.
They cannot control anything else.
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"Fadel Gheit Quotes." Quotes.net. STANDS4 LLC, 2020. Web. 11 Aug. 2020. <https://www.quotes.net/authors/Fadel+Gheit+Quotes>.
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