International accountant and shipping adviser Moore Stephens says companies in the offshore maritime sector need to keep a close watch on costs and manage their exposure to risk in the wake of the dramatic fall in oil prices.
Cassie Forman, a director with the Moore Stephens Shipping & Offshore Maritime group, says: “It is remarkable how quickly the dramatic fall in oil prices has fed through to increasing levels of financial stress in the oil and gas services industry, where the sudden drop to around $50 a barrel is triggering cost-cutting across much of the sector. Oil and gas majors are already cutting costs, and several have recently announced cuts to investment in a number of major projects. Smaller players are also reconsidering their capital deployment.
“There was a significant increase in the number of insolvencies of UK oil and gas services companies last year. Although this increase is from a relatively low base, it is significant because insolvencies in the sector have been rare over the last five years.”
Referring to the recent bankruptcy of market-leading bunker supplier OW Bunker, Forman says: “This really set alarm bells ringing in the offshore maritime and shipping industries. Although the underlying reasons for the failure are still being analysed, the fall in oil prices is certain to have played a significant part.