Coronavirus company news summary – Exxon Mobil warns of retrenchments – Baker Hughes revenue drops 31% in third quarter

22 October 2020 (Last Updated October 22nd, 2020 09:22)

22 October

The top five oil and gas companies in the US have lost $307bn in market capitalisation, a 45% slump from last year, according to latest figures from StockApps. Oil prices were already plummeting, and the pandemic only exacerbated the situation triggering the fall in revenue and market cap for industry majors. The US-China trade war, oil surplus and the Russia-Saudi Arabia impasse over oil price are some of the other factors influencing losses.

Lower production and non-conducive prices for overseas buyers are expected to impact US crude oil exports throughout 2020. Oil production in the US is not expected to recover to previous year peak of 13 million barrels per day, impacting exports, which is a major source of revenue for majority of the oil companies. October exports fell to approximately 2.1 million barrels per day, the lowest in almost a year according to the US Energy Department.

Oil major Exxon Mobil is planning to cut jobs as low oil prices lead to postponement of significant projects due to the coronavirus pandemic. The company has not disclosed the exact number of employees it will lay off but CEO Darren Woods said that the decision was taken as the company is facing one of its worst crisis in recent times. Exxon Mobil also reduced its capital spending budget by $10bn to cut its losses.

Oilfield services company Baker Hughes registered losses for the third straight quarter in 2020, as the Covid-19 pandemic triggered decline in oil prices. The income from the company’s oilfield services division, which contributes approximately 50% of total sales, dropped to $2.31bn in Q3. Orders for the company’s oilfield equipment saw a drop of approximately 60%, from the corresponding period in 2019.