Coronavirus company news summary – Russian tax changes to affect oil producers – BP cuts losses amid oil demand recovery

28 October 2020 (Last Updated October 28th, 2020 09:22)

28 October

Lukoil, a Russian oil company, warned that Kremlin’s revision of tax laws, scheduled to come into effect next year, will cause long-term ramifications for oil producers. The company has been already impacted by the Covid-19 pandemic forcing $1.5bn worth of oil projects to be put on hold. The new tax regime will increase government remittances from top oil producers. It is being introduced on a pilot basis for roughly 40 oilfields in the Siberian region.

The offshore workforce in UK North Sea was reduced by more than 30% since the beginning of the lockdown imposed to contain spread of coronavirus. The sudden retrenchments are being attributed to shutdown of construction activity and drilling operations, with the number of people losing their jobs increasing to 9,000 in August. The Workforce Insight Report 2020 said that many companies in oil sector are subscribing to Coronavirus Job Retention Scheme to avoid cutting jobs.

The drilling of exploration wells off the Norwegian coast by oil companies hit the lowest in more than a decade this year owing to spending cuts implemented to weather the impact of the Covid-19 pandemic. The drilling activity slumped drastically, falling from 57 wells last year to 30 wells in 2020. Norway is going ahead with its plan to expand oil industry by proffering lands to exploration companies, notwithstanding ecological concerns raised by environmentalists.

BP, a UK-based oil and gas company, reported reduction in Q3 losses, compared with the previous quarter, predominantly owing to lack of write-downs, increase in oil demand and balanced prices. The net loss for the September quarter was $450m, a huge decrease from the previous quarter loss of $16.85bn, owing to the coronavirus pandemic. BP, however, is retrenching 10,000 workers accounting for 15% of its total workforce, due to assets write-downs triggered by the pandemic.