August 4, 2021

5 thoughts on “Oil Price Slump – Thoughts Prompted During OSEA 2014 Exhibition

  1. Hi Rolf

    Thanks for sharing this.

    I got a feeling that we are working nearby 🙂

    You have been in this sector for more than 10 years, so you must have been through this cycle of ups and downs. The cycle itself is not scary, what is scary to me is how weak O&G companies might falter because of the drop in the core business revenue mainstream. The management should know that this is a commodities cycle taking place but hopefully they did not get their pants caught offguard by this instance.

    1. Hi B,

      Thanks for the comments.

      You are working in Tuas? Haha, I am not working for Keppel. I just took picture of their booth, since I think they are a company doing Sg proud worldwide in O&G sector. I am all along in equipment sector with experience exposing to Vessel owners and builders.

      I agree with you that from outsider/ retail investor point of view faltering business is scary for company with weak balance sheet. Invest with care. I know the difficulty myself, since I use to work in listed co responsible for overall mgmt which also incl. finance, resolving cash flow issues etc. You will never be able to wonder how bad a company from inside than from outside!

      For current situation, we must be prudent but not overly worry of collapse. Of course situation may worsen further, I don't know.

      One good thing about O&G is backlog order. This allow company to plan ahead and have more reaction time to plan cost restructuring. It is not like what retailer think that impact will be immediate. Going through the GFC is another experience that companies are more prudent and knowing better to survive.

      It is also important sometimes to look beyond balance sheet E.g. Who is leading the company, management resilience, track records of overcoming crisis, insider news of potential orders on tender etc. E.g Baker Tech has exceptional balance sheet no debt, but that does not mean it is a company to go for indefinitely. Another eg is Marco Polo. Good statistics and seems like a good buy. This is a company to sustain its business, but do they have the leader to grow? Being in the industry, we do have a slight edge knowing more about the people and company over the years.

      Its hard to convince I know. I am just reciting base on experience and what I seen and heard before.

      I definitely can be wrong, and I agree that its best to mitigate risk in this tough time for O&G companies.

      I will explain more if one day we meet. 🙂

    1. Hi Naro,

      Very nice to see you around again. Thank you for reading tihs article.

      Part 2 is in the oven. Not sure if it will be delicious when serve, but the effort to prepare is guaranteed! 🙂

      Rolf

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